In a bid to encourage grocery stores to continue accepting digital payments, Paytm has launched a new loyalty programme. The payments giant has set aside INR 100 Cr for the programme which aims to cover merchant discount rate (MDR) charges incurred by businesses for transferring money from the Paytm wallet to the bank account.
Currently, Paytm’s merchant-partners have to pay 1% MDR fees to transfer payment received on the wallet to a bank account. The fund will offer grocery stores with financial services and various marketing tools to encourage them to continue accepting digital payments through Paytm all-in-one QR codes.
Paytm senior vice president Saurabh Sharma said that banks charge a fee to load the wallet to the company. “We will be returning this 1% MDR by doubling the benefits for their business which includes various financial and business services that they use on our platform,” Sharma said in a statement.
As part of the newly launched loyalty programme, Paytm said that all the merchant partners will be eligible to earn reward points for accepting payments digitally. These points can be redeemed for a voucher instantly or for purchasing merchandise from the Paytm for Business app. There’s no upper limit on how many points a merchant can earn as it directly depends on the number of transactions done through the Paytm all-in-one QR code.
Merchants can earn these points if they accept Paytm Wallet, Rupay Cards and all UPI based payment apps. The company hasn’t clarified if payments from Visa and Mastercard are eligible for getting points or not.
Inc42 has reached out to Paytm for more details and will update the story after getting a response from the company.
Will Paytm’s Loyalty Programme Bring Back UPI’s Growth?
Since the lockdown, the number of unified payments interface (UPI) transactions has gone down drastically. In April 2020, UPI payments volume declined sharply by 19.8% as compared to March 2020, according to the latest data published by the National Payments Corporation of India (NPCI).
Meanwhile, UPI transactions dropped to 990 Mn in April, against 1.25 Bn in the previous month while the value of transactions also fell reaching INR 1.51 Lakh Cr in April, against INR 2.06 Lakh Cr in March 2020.
However, the numbers might jump back as India is shifting back to normalcy. The initiative launched by Paytm might also further encourage the merchants to accept payments via UPI.