Paytm rolls back feature that turned wallet recharge via credit card into vouchers
A number of users last week complained that money added to their Paytm wallet via credit card got converted into gift vouchers instead of wallet balance.
Paytm last week silently rolled out a major change to its platform that converted recharges to wallet via credit cards into gift vouchers.
In simpler words, if one added money to their Paytm wallet through credit card, it would be converted into vouchers, which can be used only for purchasing items from its Paytm Mall marketplace or making recharges. The money cannot be linked to the bank or transferred to their friends.
The change, however, has been rolled back as the company says it was a limited-period trial. Outlook reports that the new rule was introduced on February 15.
Paytm did not respond to our queries.
Even though a limited-period trial, the move drew ire of a number of Paytm users. Some of them took to Twitter to vent out their anger.
#paytm@vijayshekhar ..Sir..am wanting to add the money to wallet through credit card but it's going to gift voucher instead of going to wallet...plz suggest and— Chandrasekhar Satapa (@ChandraMumbai) February 15, 2018
Why I can't add money into my #Paytm Wallet using my credit card now ? Why are you forcing to buy paytm gift vouchers ? What's going on ? I haven't transfer money even single time from wallet to bank, then why this restrictions ?? @Paytm @Paytmcare @vijayshekhar— Gurvinder Singh (@GvsArora) February 16, 2018
#paytmfraud yet another way of looting its customer by paytm, added money from credit card for transfer ,15k got added but not in wallet,it got changed into paytm gift voucher without my knowledge and confirmation,now cant get them money transfered to bank#VijayShekharSharma— AK (@MISSIONVEERTA) February 16, 2018
Some users also complained about not being informed about the change in the policy.
Are you atleast liable to inform your change in policy to the consumers when previously we did the same by using a credit card. Is it a total unfair scam to get the bulk money of crores of innocent customers through which minting huge interest with this crores. #Paytm #Paytmfraud— Sachin Kasargod (@SachinKasargod) February 16, 2018
Responding to one of the tweets, Paytm said, "Hi, as you've performed this transaction through Credit Card, hence the amount has been added to your Paytm Gift Volume , which can be used as a payment instrument to shop/recharge on Paytm app or for paying at outlets/merchants where Paytm is accepted as mode of payment. If you wish to specifically add money to Paytm Wallet, in future please add money through Debit Card/ Net Banking / UPI. Thanks!"
@Paytm I added money to Paytm by credit card to send to a friend but money is added as a Paytm gift voucher. Now I cannot use this money anywhere else other than Paytm store. All this without even informing me where my money is going. I will NEVER use Paytm in the future.— Sushil Kumar (@sushil180385) February 17, 2018
Sourabha Shakya, an executive at a media firm in Delhi, said that he recharged his Paytm wallet with ₹2,500 via his credit card last week which got converted into vouchers. Though he added another ₹100 to his Paytm wallet via credit card today, but that went into his wallet account.
Paytm's limited-period trial comes months after the company announced levying a 2% fee whenever customers recharged their wallet through credit cards. The policy, however, was never implemented.
"We are suspending 2% charge on credit cards for adding money to wallet keeping users' convenience in mind," said the company in a blog post.
Credit card misuse
One of the possible reasons behind Paytm's temporary change in policy could be the misuse of credit cards on its platform. Since Paytm offers transfer to bank facility at 0% fee, a lot of users recharged their wallet with credit cards, transferred to their bank account and withdrew money. Otherwise, withdrawing cash from a credit card will see a transaction fee at 2-3%, depending upon the bank.
"Allow me to begin by submitting that when you use your credit card ( emphasis on the word credit ) to add money to your wallet (paytm Cash) , what you are doing is diverting Credit that Banks have given you to use for consumption of services into cash, wrote Anupam, an Assistant Manager at Paytm in response to a LinkedIn post.
"What you are referring to as fraud is not fraud at all , you are using credit as cash , RBI guidelines specifically discourage this. To give you an example If you go to an ATM and try your credit card to withdraw cash you are charged heftly by the credit card issuing bank simply because to discourage this practice. Credit card limit is given to use for consumption of services , you can use the paytm voucher for the sam3."