Paytm last week quietly tweaked how it accepts payments made from credit cards. Instead of allowing users to add money to their wallets directly from a credit card it converted funds added from credit cards into gift vouchers. Unlike wallet funds, gift vouchers cannot be used for peer to peer transfers or be transferred into bank accounts.

The change, which caused some outrage on social media has been rolled back according to a report on the Hindustan Times as the company said it was a limited-period trial.

A lot of anger on social media towards this move stemmed from the fact that it was done without informing users about the change in policy.

Responding to angry reactions on Twitter, the company tweeted out a canned response saying, “.. as you’ve performed this transaction through Credit Card, hence the amount has been added to your Paytm Gift Volume, which can be used as a payment instrument to shop/recharge on Paytm app or for paying at outlets/merchants where Paytm is accepted as mode of payment. If you wish to specifically add money to Paytm Wallet, in future please add money through Debit Card/ Net Banking / UPI. Thanks!”

Paytm and credit cards

This is not the first time credit card users on Paytm had to grapple with a change in policies. Last year, the company had said they will charge 2% from the customers each time a credit card is used to add money to the wallet. However, the decision was almost immediately rolled back.

The HT report speculates that the company’s attempt to remove credit cards from wallet transactions may have stemmed from possible misuse by certain customers. Since Paytm allows transfer of cash from wallet to bank accounts at 0% fee, certain users were allegedly adding funds to their wallet from credit cards and transferring the amount to their bank account for cash withdrawals. Normally a cash withdrawal from a credit card comes with a steep fee.