Hello Friends,
I am Chirag, I will be giving you a review about PAYTM today. First let me tell you that how paytm works.
It keeps our money with it & blocks it & earns interest through that money.
Let me explain it to you through an example, You have some amount in your Paytm wallet, now you transfer it t some seller for payment in exchange of any product. The amount payed by you is assigned in the name of that seller but is still with the Paytm. Now Paytm stores crores of rupees everyday like this & earn money by getting intrest on that amount.
Nowerdays almost every consumer uses Paytm wallet & many Sellers are also getting Paytm installed at their shops & are accepting payments through Paytm. They face certain problems & sometime get their money also blocked for a period of time. This is how it happens:
After KYC the limit of accepting payments is Rs 1 lakh but the limit of paying is only Rs 25000. Paytm keeps 75% of the wallet amount blocked with it.
Now some sellers don’t know this & accept huge payments in their single Paytm wallet. Now lets take a example.
A seller who has a good name in market & runs a very successful business starts accepting payments through Paytm.
Now he accepts lots of payments daily & gathers Rs 70, 000 in his wallet unaware of the fact that he could only transfer Rs. 25000 per month.
Now when it comes to transfer after transferring Rs 25000 he comes to know that he could only transfer Rs 25000 per month & now he is left with an untransferable amount of rs 45000(70k - 25k).
Now in the starting of very next month he’ll transfer Rs 25000 more & will be left with Rs 20, 000 in his wallet, which he’ll transfer next month.
The money of that seller will be blocked till 3 months, which was very important for him. He couldn’t transfer it to bank of could give it to someone else.
Also no distributor(the one who provides products to shopkeepers) accepts payment through Paytm.
There’s an option by which one could make his limit unlimited but then the seller has to pay like 1.25 or 1.5% tax extra for every transaction & its mandatory for you to be a registered seller & you have to provide several documents like Tin no. registration certificate & maybe match each & every sale amount with bills.
Tell me which customer will agree to pay the tax amount when he’ll get the same product from any other seller without paying tax or which seller could bear the tax amount himself in a period of huge competition & low margins.
I didn’t totally disregard Paytm. yes it’s good but in many aspects as it allows you to pay several bills without standing in any lines or going anywhere & provides many facilities to us, but be careful while using it & DO READ ALL TERMS & CONDITIONS* before using it.
Thanks & Regards
Chirag