Paytm drops business fees on UPI, RuPay, e-wallet

MUMBAI: Paytm has decided to make the best of the new regulations barring banks from charging merchant fees on payment services offered by National Payments Corporation of India (NPCI).

The country’s largest payments company has said that it will allow shops that sign up to receive payments for free from the Unified Payments Interface (UPI), RuPay cards or Paytm e-wallet. Until now, merchants had to pay a fee if their total receipts crossed Rs 50,000 in a month. While UPI and RuPay card payments can be received from any app, including that of rivals, the only catch is that the mode of payment will be through scanning a Paytm QR code.

Unlike in the past when card payments could be made only through a swipe machine, regulators have in recent years allowed card payments to be made by scanning a QR code. Paytm’s new common QR code can be used for accepting UPI payments from any bank or any RuPay card.

“We are dedicating 2020 to merchants. We will also continue investing in the payments business until 500 million Indians come into mainstream digital payments,” said Paytm founder Vijay Shekhar Sharma.

Besides doing away with merchant fees, Paytm is offering other incentives for merchants in the form of merchandise and in-app support for those who sell on credit. Also, merchants can start using the Paytm for Business app with minimum KYC and the credit proceeds to any account of their choice.

Sharma said that while the government move to do away with merchant fees was costly for the industry, it was beneficial to merchants and would help increase acceptance. “We feel that the government should reimburse the cost,” said Sharma.

He said that the company was adopting a ‘Robinhood’ approach, and large retail chains which integrate Paytm’s APIs (application programming interfaces) with their billing systems will continue to pay. At the same time, Paytm had cut some of its cost by charging customers who add more than Rs 10,000 to their digital wallet through credit cards.

According to Sharma, of the 26 billion digital transactions in India, 15 billion were payments made to merchant, of which 9 billion were those made by scanning QR codes. “Our share of the transactions at 5 billion is 54% and we have 210 million registered users in India,” said Sharma.