Amid the current Paytm fiasco, the Confederation of All India Traders (CAIT) has strongly asserted that such an unprecedented event in the fintech ecosystem of the country will not shatter the confidence of traders and others in the digital payment system built over the years.
Rejecting apprehensions in various quarters about reverting to a cash system, CAIT Secretary General Praveen Khandelwal firmly stated that Prime Minister Narendra Modi has strongly paved the path for the adoption and acceptance of digital payments in India, and it has now become routine. He emphasized that there are several options available in the market, and people can freely migrate to any other option of their choice.
Khandelwal added that there will be no disruption in the digital payment ecosystem of the country; rather, it will become stronger, as several other digital payment players have taken aggressive steps by deploying their sales teams on the ground which will make greater awareness. Since past many years, the CAIT is deeply engaged in promoting traders to adopt & accept digital payments.
CAIT National President B C Bhartia and Secretary General Mr. Praveen Khandelwal said that with the action taken on Paytm, the RBI has reiterated its commitment not to allow any wrongdoing in the payment sector that violates the law. They emphasized that the RBI’s strong message indicates that building businesses without established regulatory frameworks is impractical. They stressed that it must be understood by companies in every sector of the Indian economy that regardless of their size, the law will take its own course if anyone dares to flout it, and certainly, India is not a banana republic.
Bhartia and Khandelwal expressed CAIT’s concern regarding the Paytm issue as millions of its users, prominently including a sizable number of small businesses, artisans, and women entrepreneurs, besides the general public, are customers of shopkeepers. They further stated that due to the mass confusion among the trading community regarding the security of their money in various instruments of Paytm and the potential future actions by the RBI or any other government entities, CAIT has conducted an in-depth study of the issue and has identified various crucial but pertinent questions arising from the current situation, including:
1. Data Security: Reports have surfaced regarding potential data breaches and security lapses within the Paytm app, raising concerns about the safety of users’ personal and financial information.
2. Regulatory Compliance: Paytm faced scrutiny from regulatory authorities, including the Reserve Bank of India (RBI), regarding compliance with financial regulations, particularly related to know-your-customer (KYC) norms and anti-money laundering (AML) measures.
3. User Confidence: The incident has shaken user confidence in the Paytm platform, leading to questions about the company’s ability to safeguard user data and ensure secure transactions. Customers have expressed doubts about the reliability and integrity of the company’s services.
4. Legal and Financial Ramifications: The incident has raised the possibility of legal and financial repercussions for Paytm, including potential fines or penalties for any regulatory violations uncovered during investigations.
Bhartia and Khandelwal emphasized that overall, the Paytm fiasco underscores the importance of robust data security measures, regulatory compliance, and maintaining the trust of users in the digital payments ecosystem. They highlighted the need for companies to be vigilant and proactive in addressing security vulnerabilities and ensuring the safety of user data.
Both trade leaders further pointed out that another question that came into the limelight is why, since 2018, Paytm has been issued notices by the RBI year on year, and why everything within the Paytm ecosystem was not rectified, presumably forcing the regulator to take such a strong stand to protect people from any potential losses.
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