Refunds

Refund are reversal transactions wherein complete or partial money is moved back to customer’s source account (account from which actual payment was made). Refund can only be created for a successful or settled transaction. Use case for refund arise in following scenarios -

  • Customer initiated refund (returns/cancellation) - Customer has changed his mind about consumption of product pre/post order delivery
  • Merchant initiated refund - Refund can be initiated by merchant in following scenarios

    • Product/service is out of stock
    • Merchant works on prepaid model wherein initial amount was higher than final billed amount (prepaid service model)
    • Mismatch in transaction status between Paytm and merchant wherein transaction is failed state at merchant's end but is successful at Paytm's end.

You can initiate partial or complete refunds to your customer’s source account . A refund request usually takes 7-14 business days to reflect in customer’s account depending on the bank used for payment.

Ways to initiate refunds


Paytm provides two ways by which you can initiate refunds

With API
With Dashboard
You can also initiate a refund via the Refund API. Identifier of transaction against which refund has to be made is order ID (unique parameter for an order in your system) and transaction ID (unique parameter for your order with Paytm passed in transaction response)

API Flow

Steps for Refund API

  1. Initiate refund from your backend using our Refund API
  2. We validate the refund against the original order. These are basic validations like cumulative refund on this order < order value, order is not more than an year old etc
  3. Sync confirmation after validation of refund is provided in the response of refund API
  4. Once the refund is validated at our end, we deduct the refund amount from your pending settlement amount
  5. On successful deduction, Paytm sends a refund accept notification to the merchant
  6. Post successful deduction, we initiate the refund to the bank. Apart from net banking refunds, this is instant in nature. Most of the net banking refunds are file based and hence are sent to bank on next working day
  7. Once the bank accepts the refund, Paytm sends a userCreditInitiate notification to the merchant. This notification depicts that refund has been initiated and contains the latest date by which money will be credited into user's account
  8. At any point of time detailed information of the refund can be fetched using the Refund status API

Constraints on refunds


  • Once the refund is requested against a transaction, it cannot be cancelled by merchant
  • Refund request will always be credited to customer source account with which the transaction was done initially
  • Refunds can be requested for successful, settled or partially refunded orders.
  • Total refund initiated in a day has to be lower than total outstanding payable amount with Paytm. In case it is above, the refunds are not accepted
  • There are 6 partial refunds are allowed on a single transaction with done using Rupay card network
  • For wallet transaction where Paytm cashback (CB) has been processed successfully, customer will receive a refund after deduction of CB