A day after launching an in-app POS feature, Paytm on Thursday discontinued the service citing security issues. The POS feature was intended to allow merchants to accept payments via all debit as well as credit cards without the need to install the swipe machines.
The payment network majors Visa and Mastercard have raised concerns over customer data privacy and security issues, as the users are required to enter their card details onto the vendor’s smartphones to make the payment via the POS (point of sale) feature.
According to some Senior executives at various payments companies, security issues like possible misuse of user’s card data is a glaring problem with the new feature. Questions are also being raised around data being used to make international payments and information being sold to various third-party firms. The various screen-recording apps available in the market can compromise the customer’s security.
However, Paytm clarified that it does not store card details on the app or its servers. The transaction is completed on the bank’s page and follows the two-factor authentication guidelines mandated in India. Paytm is a PCI DSS (Payment Cards Industry Data Security Standard) certified company that has its 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.
– Blog Post, Paytm.
The digital payments firm has been one of the biggest beneficiaries after the Indian government demonetised high currency notes two weeks ago. It will be interesting to see how Paytm will comeback with secured and updated features. Stay tuned for more updates!