A day after digital payments company Paytm launched a point-of-sale application to encourage merchants to migrate to digital payments, the plan has been put on hold due to security concerns, reports BloombergQuint.
In a blog post published on its site, Paytm said that it is putting the product on hold to strengthen security features. The mobile app allowed merchants to accept debit and credit cards from customers without requiring the shoppers to have a Paytm app on their phones.
The company had positioned the app as a way for small merchants to overcome limitations in accepting card payments at a time when cash is in short supply. The app allowed businessmen to collect payments up to Rs 50,000 a month through Paytm.
However, the company’s decision to launch the new feature was criticized by experts and competitors as it required customers to put their card details along with the CVV code and security pin on the merchant’s phone.
Peer-firms took to social media to suggest that other similar products had stronger security features built in.
Upasana Taku, Co-founder of MobiKwik, a payments company which competes with Paytm said that the product was highly unsafe from a consumer security perspective and added that certifications required to provide such a service in a secure manner usually take three-six months.
According to Dinesh Bareja, an independent cyber security analyst, asking users to punch their card details on a merchant’s phone is “dangerous territory”. Bareja added that everyone is rushing to introduce digital innovations against the backdrop of a cash crunch in the economy.
The company, meanwhile, in its blog post highlighted that it will not compromise security. It added that it is a Payments Card Industry Data Security Standard certified company with periodic audits of its Information Technology systems by independent auditors.