Paytm charges 4% for transferring money to bank Why?


Users are angry with paytm for charging 4% money for transferring wallet money to their bank accounts. But are they know the reason why they charging it. Let’s discuss why paytm has introduced 4% as transaction charge. few of us know it, initially paytm has rolled out the transfer to bank feature free for KYC verified users.

But the rampantly misused of this feature paytm start charging 4% within hours of rolling this feature. Except the misuse there are more other reasons we will discuss all of them one by one.

To discourage frauds

Credit card are popular for their loyalty programs. Users can earn loyalty points via spending money online for anythings even on adding to wallet as well.

Credit card users follow below steps to exploit bank transfer feature

  1. add money to wallet
  2. gain loyalty points
  3. transfer money to bank account (if the transfer is free)
  4. REPEAT.

Discourage users from transferring to banks

PayTM wants their user to spend their money to their platform provided by them. which will help them in increase the no. of transaction and commission received due to those services. Which will help to increase the revenue.

Infra costs

Providing any kind of internet service includes huge capital to maintain and improve services, specially when we deals in finance. Finance company has to follow and fulfill loss of regulation and compliance laid down by the regulatory authorities like RBI.

MDR is one of the infra cost.

Attract foreign investment

For valuation of companies foreign investors check the user base and no. of transaction occur on daily basis.

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