SET­BACK FOR PAYTM, ‘POS APP’ SUS­PENDED

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Paytm has sus­pended its app that al­lowed small shop­keep­ers to ac­cept pay­ment through cards amid on­go­ing cash crunch, cit­ing risks to cus­tomer data and pri­vacy. The new fea­ture was de­signed to elim­i­nate the need for a phys­i­cal pointof-sale (PoS) ter­mi­nal or a card swipe ma­chine, in­stead help­ing small shop­keep­ers use their smart­phones to fa­cil­i­tate the trans­ac­tions. How­ever, soon af­ter launch­ing ‘App POS’ with much fan­fare this week, Paytm rolled back the ini­tia­tive af­ter con­cerns were raised over se­cu­rity of cus­tomer’s card de­tails by the in­dus­try. “Based on some sug­ges­tions from the in­dus­try, we have de­cided to add ad­di­tional cer­ti­fi­ca­tions and fea­tures be­fore mak­ing it avail­able to mer­chants. We will re-launch this prod­uct as soon as we have up­dated the prod­uct,” the Alibaba-backed com­pany said in a blog­post. In Oc­to­ber, as many as 32.14 lakh debit cards of var­i­ous pub­lic and pri­vate sec­tor banks were re­ported to have been ‘com­pro­mised’ by cy­ber mal­ware at­tack in some ATM sys­tems. Sev­eral banks, in­clud­ing state-owned SBI, had re­called a num­ber of cards while many oth­ers blocked the ones sus­pected to have been com­pro­mised and asked their cus­tomers to change PIN (per­sonal iden­ti­fi­ca­tion num­ber) be­fore use. Ac­cord­ing to the Na­tional Pay­ments Cor­po­ra­tion of India, as many as 641 cus­tomers across 19 banks have been duped of `1.3 crore us­ing stolen debit card data. In its blog­post, Paytm de­fended its prod­uct say­ing the com­pany does not store any card de­tails in the app or on its servers that are shared dur­ing the pay­ment flow. “The trans­ac­tion is com­pleted on the bank’s page and fol­lows the 2-fac­tor au­then­ti­ca­tion guide­lines man­dated in India,” the post said ad­ding that the com­pany’s IT sys­tems are au­dited pe­ri­od­i­cally by cer­ti­fied in­de­pen­dent au­di­tors.

Vijay Shekhar Sharma, CEO and founder, Paytm

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