India's largest payments and mobile commerce platform, Paytm has announced that it will remove the 'merchant fees' for all wallet transactions that happen in the offline world. This announcement aims to drive cashless transactions in the offline market.
When a customer pays a merchant, a charge is levied per transaction on the merchant by banks. These charges coupled with the need for a specialized physical hardware and it is associated costs, discourage merchants to accept digital payments. Charges vary from 0.5 percent to 2.5 percent, depending on various parameters. Some merchants make customers bear this additional cost by charging them extra, which deters the customers from paying digitally.
"By Paytm's eliminating this cost, an immense opportunity is created to digitize the 95 percent of India which still deals in cash. One of the reasons the current adoption of digital payments is low is because the existing cashless systems were not made for the mobile first world. We are deeply committed to make offline digital payments simple & ubiquitous through a infrastructure light model using the mobile," Head of payment products at Paytm, Nitin Misra.
Paytm had rolled out a QR code based payment product to enable small shopkeepers or auto drivers to receive payments. Paytm customers using their Paytm app, can now scan a pre-printed Paytm code anywhere they see a 'Paytm accepted here' sticker and make payments swiftly and securely.