Just a day after launching a new app feature that would have allowed merchants to accept debit and credit cards, online wallet company Paytm has withdrawn the same feature, citing the need to make it more secure.
"Post our launch, we have had several discussions with stakeholders on how we can make this process even more secure. 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 company said in a statement.
On Wednesday, Paytm had announced, with much fanfare, an upgraded app for merchants to replace expensive POS machines with zero fees, with claims to grow exponentially in the digital payments market by giving small merchants a cheap option over expensive card swiping machines.
"We will democratise the acceptance of cards," Vijay Shekhar, founder and CEO of Paytm, had said, addressing the media in New Delhi.
In its upgraded app, customers were required to physically punch in their credit and debit card details on the vendors' phones, which Shekhar claimed was a secure payment method as it would also require an OTP authentication by the customer.
Several payment network companies including Mastercard had raised concerns on its new card swiping product including the lack of safety and security, reported the Times of India.
Here's the full statement from Paytm announcing the withdrawal.
Driving digital payments is the need of the hour and our widely popular QR code solution, where one only needs a Paytm QR sticker and Paytm app to accept wallet payments is now used by hundreds of thousands of merchants across India. We over the last year have built a 15 crore user base and a network of over 10 lakh merchants. The scale has been possible owing to the easy-to-deploy solution that we have built by receiving feedback from thousands of merchants and improved upon constantly as opposed to the traditional and capital intensive solutions.
The app PoS launched yesterday was yet another feature requested by our merchants considering their limitations in accepting card payments and the scarcity of cash.
This feature allows small merchants to accept all debit and credit cards without the need of a card machine. The launch is in line with our infrastructure-light, simple, scalable & affordable model, where anyone with a mobile phone should be able to accept payments. In this payment flow, we do not store any card details in our App or in our servers. The transaction is completed on the bank's page and follows the 2 factor authentication guidelines mandated in India. Paytm is a PCI DSS (Payment Cards industry Data Security Standard) certified company that has it's IT systems audited periodically by certified independent auditors.
Post our launch, we have had several discussions with stakeholders on how we can make this process even more secure. 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. We are working closely with everyone in the cards ecosystem with the commitment to expand digital payment acceptance in the country.
- With Ivan Mehta