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Paytm claims 1M merchants; updates app to accept payments, but it’s no “App PoS”


Alibaba backed payments company Paytm seems to have updated its mobile application to allow merchants to accept payments. Hat tip: @manogath. A Paytm executive has confirmed this to us, though its founder Vijay Shekhar Sharma and its corporate communications team have not responded to calls or text messages seeking clarifications. We’ve also not heard back from them on whether changes have been made following an intervention from the Reserve Bank of India. Our analysis of the ill fated App PoS is here.

We updated the Paytm app earlier today, and tried the service: the “Accept Payments” option now ensures that merchants have to type in a mobile number for the recipient,  who is sent an SMS, who has to click on a link, be taken to a website, and then has the option of paying via credit/debit card, or netbanking. The screen for UPI says it is “coming soon”.


Security issues with its earlier approach

Sharma is also yet to respond to an email we sent yesterday, asking about whether the planned update addresses security concerns raised when it had launched its application earlier, and specifically requesting information on what Paytm is planning to do to address keylogging. Why? Because Abhishek Muthian of Timebender Technologies had filed a bug bounty submission with Paytm earlier, highlighting that a keylogger can be used to steal user card details in a merchant phone. Oddly enough, even though this is a major security issue, the Paytm team it appears (as per a screenshot posted by Muthian) said this was removed because of “business risks”, and not because of security issues. Vijay Shekhar Sharma, when we had asked him about the Muthian’s blog post, had then said that “This news is false.” The keylogging issue, though, had been validated by an independent technology expert we spoke with, and thus, the question was important.

The new update addresses this keylogging issue, and does something similar to what Mobikwik is doing with its Mobikwik Lite app. Note that Mobikwik has also updated its application post launch, and made changes. Mobikwik said that they haven’t received any notice from the RBI prior to the changes. Note that Mobikwik is doing KYC (Know Your Customer) verification before merchants accept wallet payments. Paytm doesn’t appear to be doing that (I’m not registered as a merchant).

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The RBI has to keep a close watch on Mobile Wallet and Mobile Banking apps, given that they take significant permissions from users.

Growth in offline transactions

In other Paytm news, the company has announced on its blog that it now has 1 million merchants. According to the company: “The merchant network grew steadily from 37K in January’16 to 500K in September’16. The next milestone arrived on 25th November, 2016 when the 1 millionth offline merchant was on-boarded.”

In addition, it has released data on growth in offline transactions across small town India:

From a regional perspective, it claims to have seen the following growth in offline transactions:

  • East India: an over 10 times increase
  • North India: an over 5 times increase
  • South India: an over 4 times increase
  • West India: an over 5 times increase

The company says on its blog: “Over the past week, the number of Punjabi and Kannada users grew by around 300%, Malayalam, Telugu and Gujrati users rose by 200%. In the same period, the number of Tamil and Marathi users shot up 170% while Bengali and Hindi users grew over 150%.”

Its competitor Mobikwik says that they’ve seen around 2 million downloads of their Mobikwik Lite app within 24 hours.

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