Paytm: Rewarding you for paying your bills

What is Paytm?

Bills are a fact of life.  Whether it’s credit card bills, rent, taxes, tuition, utilities.  Life costs money, and we have to pay this bills. Paytm is a cellphone-based free bill payment platform.  Through Paytm, you can make all (or almost all) your bill payments from one place.  You can set up alerts, reminders, and notifications to help you avoid any late fees.

Paytm Home Screen

How much does it cost to use?

There are no sign-up fees and no transaction fees of any kind.  And there is no fine print! Paytm costs you absolutely nothing to use.

How does it work?

You need to add both your billers and your payment methods.  Paytm advertises as having more than 5000 billers, and you can use your bank account or credit cards to pay these bills. You can also use Paytm to send money to friends and family. This isn’t a unique function though, and essentially replicated what you can do with PayPal or Interac email money transfers.

There are two different types of account balances on Paytm that can create value for you. Paytm Cash is essentially a cash reward balance that you can use towards bill payments or towards gift card purchases. Paytm Points is a second rewards system. You accumulate 1 Paytm Point for every dollar of bills that you’ve paid through Paytm. You can then redeem the Paytm Points to boost your Paytm Cash back rebates on gift card purchases.

Why should I use it?  Can’t I just use my online banking to do the same thing?

Yes, you can make your bill payments through your online banking, but as I see it, there are two main benefits to using Paytm.  The big thing that Paytm offers users, is the ability to use a credit card to pay for services you aren’t usually able to use a credit card for.  Eligible billers on Paytm include property taxes, university’s for tuition, insurance, and utilities.These billers don’t typically take payment by credit card but using Paytm would allow you to rack up your credit card rewards.Paytm claims to have more than 5000 billers on their platform.  Both benefits I see are connected to using credit cards:

1) accumulating credit card rewards or meeting minimum spending thresholds.  

2) when using a credit card instead of a pre-authorized debit from your bank account, the couple weeks between the payment being placed on your credit card and the due date for when you need to pay your credit card balance, may be enough time to help you avoid paying overdraft or any late fees if you have insufficient funds on your bill payment due date.

Gift cards

Paytm offers its users discounted gift cards. For example, you could buy an amazon gift card for 3% off. The catch with these gift cards, is that the discount comes in the form of Paytm Cash, so you have to wait to pay a bill using your Paytm Cash before you can “realize” the discount. Gift cards categories include: Travel, Food & Drink, Electronics, Beauty & Wellness, Home, Gifts & More, and Clothing. I’ve found that while there are a lot of categories, there is not a ton of individual gift card choices at this point. That being said, some of the options that caught my attention included Amazon, Best Buy, Tim Horton’s, Just Eat, Ultimate Dining, and Esso cards. Unfortunately, it doesn’t look like the cash back rates are high enough to really motivate purchases. They do however provide opportunities to get more bang 4 your buck, if some of the gift card options fit into your regularly spending or you’re anticipating a significant planned purchase in the future. Most cash back offers (after being bloated with Paytm Points) appear to be worth 5% to 10%. One exception is the $50 Tim’s Card, where you can get $25 cash back if you boost with 5000 Paytm Points. You’d have to pay $50 and have the 5000 Paytm Points, but you would end up with the $50 Tim’s Card and $25 Paytm Cash to put towards your next bill.

A screenshot of my Paytm Rewards –

How does Paytm turn a profit?

Paytm doesn’t advertise their revenue streams. It stands to reason that Paytm profits through the combination of driving traffic and bulk sales. One would presume that Paytm generates revenue by selling discounted gift cards, and driving consumers to those partner retailers. Another possibility, is that Paytm is able to generate cash flow through the volume of bill payments that they process, by “purchasing” transactional fees at discounted bulk rates. A further angle that Paytm could be taking, is to use the consumer data that they are collecting. They may be able to see and sell spending habits and patterns. The last option that I’ve been able to surmise, is that Paytm has the long-term strategy of controlling as much of the Canadian bill-paying market as they can.

Paytm Points:

On March 17th, 2018, Paytm Canada launched their Paytm Points rewards system. For every dollar of bills that you pay through Paytm, you receive 1 Paytm Point. You can then turn around and redeem accumulated points to boost your cash back when purchasing gift cards. One of the early offers is for a digital Tim Horton’s card. If you redeem 5000 Paytm points when purchasing a $50 gift card, you will receive $25 of Paytm Cash added to your account. It also appears that you will be able to purchase merchandise with your PaytmPoints. At this point though, there are only limited merchandise offers, and none are available to me in Alberta.

What’s the catch?

There are two pretty big catches.  The first is that there are now ‘costs’ to using AMEX and Visa cards.  Paytm doesn’t charge you but your AMEX and Visa will.  Some payments on a Visa card, may appear as cash advances, meaning that you won’t realize any rewards and you will be paying interest on any payments you’ve made.  You are also looking at a 2-3% charge on any payments they process on an AMEX card, also negating any potential rewards.  Earlier, I mentioned that Paytm is free to use. As I understand it, Paytm doesn’t administer these charges. Visa charges their customers for cash advances.  I’m not an AMEX card holder, but as I understand it, AMEX charges cardholders for payments on Paytm.

My experience:

I am a Paytm user.  I haven’t been one for long, but when I created my account, payments made via AMEX and Visa cards weren’t treated as cash advances nor were there any extra charges.  On that point alone, Paytm is less attractive than it was when I registered.

I have also found that the Paytm website feels incomplete.  After reading a review or seeing an advertisement, you go to the website looking for information and come away with at least one question unanswered.  My sense of the website is that it is only organized well enough that you can find ‘headlines’, and the fine print or detailed explanation of how it works is challenging if not impossible to find.

When viewing your biller details, Paytm also shows you a record of your past payments
Paytm Bill Payment screen

Paytm is real.  I have processed payments from my bank account, though I haven’t used a credit card as a payment method yet.  I have received some quantifiable rewards though. I qualified for a $10 referral bonus, which took next to no effort.  I have also used a $10 promocode from buildwealthcanada.ca (check out the podcasts), and received $20 for 2% cashback on the first $1000 of any bill payments in January 2018.  All told, that’s $40 for me!

On Feb 1, the $20 (2% cash back off the first $1000 of bill payments) in January was credited to my account

My take:

On one hand, I like the fact that Paytm doesn’t cost you a penny to use (for now).  On the other hand though, I’m really not crazy about the fact that you need to spend money to realize any rewards!  That’s a pretty big catch!

Should you use Paytm?  Yes, but only opportunistically.  What do I mean by this? You should use Paytm if or when you can come out ahead.  Unfortunately, my municipal taxes and local utility are not listed as Paytm billers (yet).  However, if you can pay rent, or pay your utility bill, or pay tuition, or pay property taxes by credit card through Paytm and your credit card has good rewards, do it!  They tend to be larger recurring sums, that could substantially increase your credit card rewards. There’s one caveat though. Make sure you pay your credit card bill on time. Any interest owed on balances carried forward, would wipe out any potential rewards.

There’s one more thing, and this is speculation on my part, but it really seems like Paytm is aggressively trying to recruit users.  In the last couple months, there have been a number of promotions being advertised:

  1. There was the 2% back up to a maximum $20 cashback reward for any and all bill payments in January 2018
  2. For a number (perhaps as many as a dozen) Canadian universities, students who sign up with their university email will get $20 deposited into their account.
  3. For Fido, Bell, Telus, Rogers customers, get $10 cash back after paying any bill of at least $50 if you use the corresponding promo code.
  4. There’s also promo codes for Enbridge and Toronto Hydro customers, that grant $10 cash back after any bill payment of at least $50.
  5. There was a $20 promo code that you could get, just by living in Toronto and a $10 promo code for Vancouver residents.
  6. There was a 5% cashback (up to a maximum of $10) offer for Markham residents to pay their property taxes.

Note:  I haven’t listed any of the promo codes because they were limited time offers that have since expired.

To me, this seems like a lot of promotions.  I’m not sure what the long-term future is for Paytm in Canada.  As a consumer, I need a little bit more to be a devoted regular user. That being said, in the near future, it seems like there are going to be Paytm promotions left, right and centre.  As a user, I won’t be regularly paying my bills on Paytm.  The rewards are not currently enough to motivate me to pay my bills through Paytm, none of the gift card offers fit into any regular or anticipated spending.  What I’d like to see, is gift card offers that fit my regular spending habits, or, merchandise and gift card offers that you can get paying only with Paytm Points (as I understand it, AirPods are available for purchase with Paytm Points to users in Ontario, but I don’t qualify as an Alberta resident).  That being said, I’ll sit and watch for any promotions that I qualify for. That being said, I’ve gotten $40 out of Paytm in just a couple months and that $40 may have been the easiest and quickest $40 I’ve made so far.  There is next to no time cost.  The app makes it easy to setup and link your bills to your payment methods and it doesn’t take any more time to pay your bills than it does through online banking.  However, the moment that Paytm starts charging me, that’s the day I’ll deactivate my account.

Bottom Line – Paytm offers free, quick and easy money

Paytm is not likely to ever offer its users hundreds of dollars worth of value in a year, but, I figure it’s quite reasonable to expect that you can get between $30-75 on an annually for doing exactly what you need to do anyways (pay your bills).  Even if you’re like me, and the gift card offers are not very useful to you, you can boost your credit card rewards by a significant margin if you use Paytm to pay your utility bill and/or your property taxes.  Given that Paytm is free to use (if you’re using your bank account or a MasterCard), that’s value left on the table.  The promo codes that Paytm seems to offer periodically end up being extra!

If this review has been informative for you and you decide to give Paytm a shot, I hope you’ll consider using my referral code (PTM7319649).  We’d both get $10 Paytm cash after you’ve made $50 worth of bill payments

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