Even as India crawls towards a more robust digital payments ecosystem following the demonetization of Rs 500 and Rs 1,000 currency notes, mobile wallets like Paytm and Freecharge have come to rescue for cash-strapped customers as well as smaller merchants. And as expected, Paytm has seen a steep spike in the number of transactions and addition of new merchants after the demonetization. Also Read - How to book COVID-19 vaccine slot via Paytm App, get Covaxin and Covishield shots with these simple stepsAlso Read - Alert! Paytm cashback scam: Fake Paytm website, it's a trick to steal your money
To encourage more wallet payments in India, the RBI today raised the limit of the maximum amount of money one can store per month on their digital wallets from Rs 10,000 to Rs 20,000. Merchants who have their bank accounts linked to their wallet, can transfer up to Rs 50,000 to their bank account via digital wallets every month. Now, Paytm is looking to ride high on the growing traction on its platform and overall mobile wallet segment with a new service that allows small and medium merchants to accept all card payments including Rupay, Visa, MasterCard and Maestro for transactions. Also Read - 5 apps helping people get through the COVID-19 second wave: Twitter, CoWIN, Aarogya Setu
The service has been added via an update to the existing Paytm Android app, which adds a screen where a customer can enter their credit or debit card details and pay the merchant like any other online transaction. In simpler words, the customer tops up the merchant’s Paytm wallet for the due amount using their debit or credit card. The in-app service aims to do away with the need of traditional Point of Sale (POS) or popularly known as card swipe machines for smaller merchants in the wake of currency demonization.
According to Paytm, the penetration of POS machines isn t high as compared to penetration of debit and credit cards. According to figures provided by the company, India has 74 crore debit and credit issued while average volume of monthly POS transactions conducted via debit and credit cards is about Rs 20 crore. Moreover, there are just 14.8 lakh POS machines and only 7 lakh retailers use POS machines. India needs a very innovating mobile POS machine and Paytm has already been accepted by many merchants. By extending our merchant network to all other payment networks, we are enabling digital payments to a very large number of Indians, Paytm founder Vijay Shekhar Sharma added.
How does it work?
To get started, merchants need to download the updated Paytm app from Google Play store. Right now, the feature is available only for the Android platform, though the company has plans to roll it out to iOS as well in the near future. After having downloaded the updated app, merchants need to declare themselves as businesses, you can find out how to become a Paytm merchant from here. Then merchants then need to link their bank accounts with their Paytm accounts to instantly receive the payment.
To receive the payment, merchants need to swipe to Accept Payment icon on the new updated app. They can then hand over the phone to customer to enter card details. For customers, the process is very similar to what they do for an online transaction through their debit or credit cards.
After having entered the amount and card details, customers need to tap on the proceed after which they are directed to banks payment gateway. Customers can complete the transaction through the OTP they have registered their mobile number. Customers can also receive a copy of the transaction via different messaging tools like WhatsApp or Messenger.
One of the important things to note about the process is that the payment details are secured via standard 128-bit encryption and that customers card details aren t stored on merchant s end. The process also adheres to RBI s two-factor verification process for the payment.
It is worth pointing out here that as per latest RBI guidelines, merchants can transfer up to Rs 50,000 to their banks through mobile wallet per month. However, merchants can have a maximum of Rs 20,000 in their wallet at any given point of time. Right now, Paytm is levying zero percent fees from merchants on all debit cards transactions and 2 percent on credit cards transactions till December 31, 2016. Paytm hasn t revealed whether it will continue to keep it free offer. ALSO READ: How to go cashless with digital wallets as Rs 500, Rs 1,000 currency notes are now banned
How does it help?
For people living in metro cities, swiping credit or debit cards for payments isn t really a problem as a lot of big and medium vendors have the POS machines. Following the currency demonetization, people across the country have faced problems while making payments at smaller vendors, say your green grocer. It s highly unlikely these smaller vendors will have a POS machine for accepting payments, but we have already seen many of them embracing mobile wallet platforms like Paytm. The new feature will enable several users who don t have a Paytm account but have a debit card to make cashless payments.