After PhonePe, Paytm starts taking a surcharge on mobile top-ups

Paytm has started charging a surcharge for mobile top-ups through its platform. The charge can be anywhere between Re. 1 and Rs. 6 — depending on the top up amount. It is applicable on all Paytm mobile top-ups, regardless of payment method – whether via Paytm wallet balance or Unified Payment Interface (UPI) or by credit or debit bank card. The update is notably not applicable to all users at this time. Last year, Paytm competitor PhonePe launched a pilot project to charge a premium on mobile top-ups.

According to user reports available on Twitter, Paytm has started taking the surcharge as a convenience fee, although Gadgets 360 can now confirm that the surcharge is available as a platform fee. This seemed to have been initially deployed to a few users at the end of March. However, the sudden increase in recent user reports suggest that the update is now applicable to a large number of users.

Gadgets 360 has been able to independently verify that the surcharge is not applicable to all Paytm users at this time. It is also important to note that additional fees apply to transactions above Rs. 100.

Paytm takes a surcharge on mobile top-ups from some users

However, selected users who have been deemed part of the upgrade have to pay up to Rs. 6 as an additional fee in addition to the mobile recharge amount they pay through the Paytm app.

A person familiar with the development told Gadgets 360 that Paytm takes the supplement from some users as one of the experiments to increase its revenue.

In 2019, Paytm job on Twitter to claim that it would not charge customers any convenience or transaction fees when using a payment method that includes cards, UPIs, and wallets.

A query sent to Paytm has not elicited a response at the time of this article’s publication.

Similar to Paytm, PhonePe in October started charging customers a surcharge it calls a “processing fee” for mobile recharges over Rs. 50. The then Walmart-owned company said the fee was applicable as part of a “small-scale experiment” and did not affect all users.

User reports available on social media, however, indicate that the number of users seeing the additional charges on their PhonePe account is not miniscule, as hundreds of users have reported that the platform takes additional charges for their mobile recharges.

PhonePe and Paytm have yet to officially reveal the criteria they use to select customers to charge the additional fees.

A spokesperson for PhonePe declined to comment on questions regarding its criteria for the experience and the total base of its selected users for the supplement.

Payment Council of India (PCI) chairman Vishwas Patel told Gadgets 360 that telecom operators in the country recently reduced the commission to around 50 percentage points (pip) on transactions with online retailers. In addition to this, he noted that if a customer paid by credit card, where the merchant discount rate (MDR) is 1.8%, it was not possible for the online retailer to process the refills.

However, platforms such as Amazon Pay and Google Pay do not charge any additional fees for mobile top-ups at this time. Some of the price-conscious users are therefore shifting their charging tasks to these platforms for the time being.

Telecom operators, including Airtel, Vi and Jio, also support mobile top-ups through their native apps. The Paytm and PhonePe surcharge could thus be an opportunity for telcos to ultimately direct customers towards their solutions.


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