Paytm, India’s leading Mobile wallet and e-commerce firm scrapped ‘per transaction fee’ for consumer-to-merchant offline wallet transactions, a move to boost digital money transfer on the platform. The fee ranged from 0.5% to 1.75%, depending on the merchant service provider.
“Often these charges discourage a merchant to accept a digital transaction and they end up asking the consumer to bear the cost, which is illegal,” said Nitin Misra, payment products head at Paytm. “By eliminating this cost, we are looking at an opportunity to digitise that 95% of India which still deals in cash,” he added.
“We have crossed credit card transactions and today 95 out of 100 wallets are Paytm,” said Misra. “In our business, I think we have reached a sweet spot. We have a payment business, we have a marketplace and now soon we will have a payments bank. So we do not have any competitor,” he added.
According to the company, Paytm is the country’s largest mobile payments platform, having clocked 120 million wallet transactions and having nearly 150,000 merchants on board. It is expected to start the payment bank business by June.
Mobile wallet is a virtual wallet through which a customer can preload money and use it to pay for services without undergoing the two-way authentication process.
As per the RBI norms, a consumer can add up to Rs 10,000 in a m-wallet in a calendar month. Under peer-to-peer and peer-to-bank payments, the wallet holder cannot add more than Rs 25,000 a month. As merchants do more business than the set amount, they are not bound by such limitations. Adding on to this, Paytm has come out with merchant account wallet where no transaction fee is charged.