Fintech unicorn Paytm has denied media reports of it charging transaction fees from customers. Earlier today, the company was reported to start passing on the Merchant Discount Rate (MDR) to its consumers.
MDR is charged by the banks and card companies for digital transactions. According to a media report, the digital payments company had been absorbing these charges till now and thus wasn’t making any profit on the payments made through the platform.
The report had noted that the levies will be applicable for all online transactions such as wallet recharge, bill payments, booking tickets, and so on.
However, the company said in a recent statement that, “Paytm does not charge or levy any convenience/transaction fee from our customers on using any payment method which includes cards, UPI, net-banking and wallet. Paytm customers can continue using all services available on our platform without any fee (same as before).”
“There have been few merchants like educational institutes or utility service providers who do not absorb credit card charges and expect customers to pay the same. In such cases, we recommend our users to pay through their debit cards and UPI to avoid these charges,” the company added.
It also stressed that the company does not have any plans to levy any such fee in the future either.
Paytm: Clocking 5.5 Bn Transactions in FY19
Delhi NCR-based Paytm was founded by Vijay Shekhar Sharma in 2010. Initially launched as a digital wallet company, the company has since then expanded into multiple verticals including ecommerce (Paytm Mall), online payments, mutual funds (Paytm Money), and had also launched its own Payments Bank in 2017.
Paytm has claimed to reach a gross transaction value (GTV) of over $50 Bn, while clocking 5.5 Bn transactions in FY19.
The company had attributed this growth to the rising adoption of Paytm across multiple use cases such as retail payments, fees, utility payments, travel booking, entertainment, games among others. Its recently launched subscription-based rewards program Paytm First also contributed to this growth along with increasing the customer retention.
Earlier last month, the Ministry Of Electronics and Information Technology (MeitY) had asked Paytm to support its target of facilitating 40 Bn digital transactions in FY20.
Paytm claimed to own 50% market share of the payment gateway industry in India, with 400 Mn monthly transactions on the platform.
According to a 2018 NITI Aayog report, India’s digital payments industry is estimated to grow to $1 Tn by 2023. The report also noted that the value of digital payments will likely jump from the current 10% to over 25% by 2023. Other players trying to tap into India’s digital payments sector include Flipkart-owned PhonePe, Sequoia-backed BharatPe, and Google Pay.