India mobile wallet company Paytm detailed a INR1 billion ($13.2 million) loyalty programme designed to fund promotional material and measures to encourage the use of digital payments in grocery stores.

In a statement distributed through the Press Trust of India, the company said the cash was partly a way of returning a 1 per cent charge now being placed on transactions made with Paytm wallets.

Using the fund, Paytm will cover the cost of a range of business and marketing tools designed to accelerate the growth of digital payments using its QR code system.

As part of the loyalty scheme, eligible local grocery stores will earn points for transactions made over its platform, which can be redeemed against promotional merchandise including its payment-related equipment.

Among branded items offered by Paytm to its merchants are radios, clocks and multi-language payment devices.

Unveiling the initiative, Paytm SVP Saurabh Sharma said the move was equivalent to returning extra charges placed on retailers by doubling the benefits offered to them.