Tech

Paytm is Now Charging a Surcharge on Mobile Recharges, Similar to PhonePe

The surcharge varies between Rs. 1 and Rs. 6 depending on the amount of the recharge.

Paytm has begun charging a fee for mobile recharges made through its platform. Depending on the recharge amount, the charge can range from Rs. 1 to Rs. 6. It applies to all Paytm mobile recharges, regardless of the payment method (Paytm Wallet balance, Unified Payments Interface (UPI), or bank credit or debit card). At this time, the update is not applicable to all users. PhonePe, a Paytm competitor, began testing a surcharge on mobile recharges last year.

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Paytm began charging the surcharge as a convenience fee, according to user reports on Twitter, but Gadgets 360 can now confirm that the additional charge is available as a platform fee. It appeared to be rolled out to a small number of users in late March. The sudden increase in recent user reports, on the other hand, suggests that the update is now applicable to a large number of users.

At this time, Gadgets 360 has independently verified that the surcharge does not apply to all Paytm users. It’s also worth noting that the surcharge only applies to transactions exceeding Rs. 100.

Select users who have been included in the update, however, will be charged an additional fee of up to Rs. 6 in addition to the mobile recharge amount paid through the Paytm app.

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Paytm was taking the surcharge from some users as one of the experiments to grow its revenues, according to a source familiar with the situation.

Paytm announced on Twitter in 2019 that it would not charge customers any convenience or transaction fees when they used any payment method, including cards, UPI, and wallet.

PhonePe, like Paytm, began charging a “processing fee” to customers for mobile recharges over Rs. 50 in October. The charge was applied under a “small-scale experience” and did not affect all users, according to the Walmart-owned company at the time.

However, user reports on social media suggest that the number of users who are seeing the additional charge on their PhonePe account is not insignificant, as hundreds of users have reported that the platform is levying the charge for their mobile recharges.

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Both PhonePe and Paytm have yet to publicly disclose the criteria they use to select customers for the additional fee.

In response to questions about the experiment’s criteria and the total number of users chosen for the surcharge, a PhonePe spokesperson declined to comment.

Vishwas Patel, Chairman of the Payment Council of India (PCI), told Gadgets 360 that telcos in India recently reduced commission on transactions to online retailers to around 50 percentage-in-point (pip). Furthermore, he stated that if a customer paid with a credit card, where the merchant discount rate (MDR) is 1.8 percent, the online retailer would be unable to process recharges.

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Nonetheless, platforms such as Amazon Pay and Google Pay do not currently charge any additional fees for mobile recharges. As a result, some price-conscious users are temporarily shifting their recharge tasks to these platforms.

Mobile recharges are also supported by some telecom operators’ native apps, such as Airtel, Vi, and Jio. Paytm and PhonePe’s surcharges could thus be an opportunity for telcos to entice customers to use their services over time.

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