Demonetisation has pushed users towards digital modes of payments and transactions in India.
Due to the significant rise in the number of people using mobile wallets, leading companies like Paytm and MobiKwik have made transferring funds from their wallets to customers' bank accounts free.
Several users have taken advantage of this feature to rotate money, forcing Paytm to introduce a 2% charge on using a credit card for adding funds to its wallet on Wednesday. But the company backtracked on the move in just 24 hours, citing customer inconvenience.
International Business Times, India, found several cases where people were using this free transaction feature to their benefit.
Paytm was more widely used, compared to MobiKwik, according to our survey. Paytm has said that it will build new features to curb any kind of misuse of credit cards on its platform.
The ability to send funds back to a savings account from an e-wallet for free enables users to make credit card payments from their savings accounts. Both Paytm and MobiKwik have the option embedded within their respective applications.
In Paytm, users will go through Passbook > Send Money to bank> select amount > Transfer > Enter bank details > Send, to make instant transfers.
New customers will have to wait for three days before sending money to a bank account or complete KYC formalities to instantly enable the feature.
In MobiKwik, users can go to the official website, login to the account, click on Pay or Transfer tab and select "Send to Bank". Enter the bank details and send the money after verifying the account via an OTP sent to your registered phone number.
There are limitations to how much users can transfer from e-wallets to banks.
In Paytm, users can send only Rs5,000 per transaction and up to Rs25,000 per month. MobiKwik users can send Rs5,000 at a time provided the KYC is completed, and there are no monthly limits like in Paytm.
Normal users can store up to Rs20,000 in both wallets in a calendar month, but completing KYC pushes the limit to Rs1 lakh.
Note: IBTimes, India does not encourage or advise users to indulge in the process of rotating money using Paytm or MobiKwik as platforms in any way. This report is based on occurrences discovered by this publication and has no association with any bank, e-wallet or another organization.
