With over 350 million downloads, Paytm is by far the largest online payment platform in India, allowing users to conveniently, and free of charge, transfer money from one mobile wallet to another.
So What Exactly is Paytm?
If you’re wondering whether as a foreigner you can use Paytm, the chances are you already have an idea what Paytm is. It’s now a common payment method which can be used throughout India for a whole variety of purposes.
Paytm is the most popular UPI (Unified Payment Interface) in India. A mobile/digital payment method that directly transfers funds from one digital wallet to another, or from a digital wallet to a bank account. With no need for a card network and expensive card processing fees.
It has a wide-number of use cases and Indian residents use it to pay a whole host of different things, including:
- Utility bills such as electricity, broadband, water, gas and many more.
- Mobile top up, metro card and credit card bills.
- Flights, bus tickets and train tickets on IRCTC. Either book directly on the app or use the Paytm payment method on the merchant’s site.
- Pay partner applications like Uber and Zomato.
- One of the most frequently used functions is to pay in-store using either a phone number or QR Code. Even in more rural areas of India, you might find that merchants will accept Paytm on top of cash.
Is Paytm Safe?
Paytm wallet is a secure and Reserve Bank of India-approved digital wallet. All users are required to pass KYC verification if they are to load money to their Paytm account balance, which leads us onto our next question…
Is it Possible for Foreigners to Use Paytm?
As per current Paytm guidelines it is not possible for foreigners to use the Paytm wallet at-present. The Paytm guidelines state:
“As per our current process, all Indian citizens, Indian residents and Tax residents of India and of no other country who are above 18 years of age are eligible for KYC. We will be enabling KYC for minors and foreign residents soon.”
KYC, standing for Know Your Customer, is a compliance requirement that any regulated and respected financial institution must adhere to. It means that when you register for an account, you can prove you are who you say you are.
Paytm has two levels of KYC; minimal KYC and full KYC. Users with minimum KYC can add up to Rs. 10,000 per month to their Paytm wallet, users with full KYC can add up to Rs. 100,000 per month to their Paytm wallet.
Is Paytm Completely Ruled Out for Non-Residents?
Whilst you cannot hold a balance in your Paytm wallet, it is still possible to use Paytm for money transfers and make purchases using credit/debit cards without minimum KYC.
This does, however, drastically reduce the level of Paytm functionality you can access. You will not be able to pay merchants by either scanning a QR code or paying their mobile phone number. Merchants will need to have a Paytm point-of-sale machine in order to process card payments. More than 30 Million merchants use Paytm QR to accept digital payments but many less have the required point-of-sale machines to process card payments.
So is it Worth Registering With Paytm?
To register for Paytm you will need a local sim card. Given that you’ll only be able to use Paytm to make bank transfers or credit/debit card payments, it probably isn’t worth the hassle.
Using Paytm With a Credit or Debit Card
There is no need to register for Paytm to pay via credit or debit card in India. Merchants will either have point-of-sale software to accept card payments or they won’t. If they do, you’ll be able to pay by card without registering for Paytm.
Always carry cash, particularly out of the big cities as you won’t always be able to pay by card.
Just remember whether you pay via credit or debit card through Paytm or not, using a credit card internationally usually entails extra fees.
Normally, your card issuer will charge a foreign transaction fee (around 3%) and an FX markup on the currency conversion (could be anywhere from 0.25% – 5%).
However, this isn’t always the case. Find the right credit card and you may have no foreign transaction fee at all, plus they may even pass on the same exchange rate that Visa or Mastercard exchange currencies (usually around 0.25%). Meaning you only pay 0.25% in total fees to your card issuer.
The last thing you have to worry about when paying via a credit card internationally is any potential merchant processing fees that apply. Paytm charges merchants 2.8% to process international cards – merchants will then likely add an extra 3% to your bill in order to cover this.
Using Paytm for Bank Transfer
Using a bank transfer as a payment method on your travels can certainly be helpful. If you’re paying for an expensive tour, it will likely prove cheaper to pay via bank transfer, though this will always depend on how competitive your card issuer is and how competitive your bank transfer provider is.
Again, there is no need to use Paytm for bank transfer. You’d be better off finding a low-cost online money transfer company. One provider which is cheap for bank transfers to India is Wise.
Final Thoughts: Paytm for Foreigners
Without access to the Paytm wallet, it probably isn’t going to be worth your time registering for a Paytm account. It’s possible to use Paytm as a foreigner to pay via credit or debit card but the same international card processing fees will apply. The onus is on the merchant to have the point-of-sale software to accept card payments, and if they do, there’s no need for you to have a Paytm account. There’s no doubt that with full access to Paytm, it would be well worth registering – you’d be able to load your Paytm wallet and then transfer money free of charge to a merchant, either by phone number or scanning a QR code. Payment would be low-cost and easy. Watch this space as Paytm has announced they will be enabling KYC for foreign residents soon.
