Paytm raises concern over security in WhatsApp Payments, battles for fair play
In a sudden twist in the Indian digital payments portal sector, popular digital wallet service Paytm’s founder Vijay Shekhar Sharma has raised concerns over privacy and security issues with WhatsApp Payments after the latter rolled out its payments service a few days ago. Sharma took to Twitter to express his concern about WhatsApp not adhering to the Unified Payments Interface (UPI) backed by the National Payments Corporation of India (NPCI).
Shekhar’s latest tweet has raised objections over Facebook-owned messenger service bringing in their own twist to the unified payments protocol created for digital transactions. “After failing to win war against India’s open internet with cheap tricks of free basics, Facebook is again in play. Killing beautiful open UPI system with its custom close garden implementation,” he wrote on the platform.
Digital wallet services in India operate on the UPI system created by NPCI. The government-backed system requires users to connect their Aadhaar numbers along with the bank accounts to their mobile numbers for carrying out digital transactions. However, WhatsApp’s latest payments service operate using in a slightly different way — it only requires users to link their mobile number, which is registered with WhatsApp, with the bank account. Basically, it is capable of undertaking peer-to-peer transactions, without requiring users to log in.
We reached out to Paytm with regards to the matter and Deepak Abbot, Senior Vice President for Paytm said, “We believe India is an open market that welcomes tech and business innovations from across the world. However, WhatsApp’s UPI payments system is a classic case of a large company with dominating distribution abusing an open platform via custom-implementation to gain undue advantage. We believe this model of making an interoperable identifier invisible affects the core principle of UPI payments.”
An Economic Times report mentions that sources close to NPCI have assured that WhatsApp will be asked to implement all the necessary features when the service goes live in the coming days.
WhatsApp’s payment service has been rolled out to a limited number of users for testing and it is yet to be seen whether WhatsApp implements a new procedure in their system to tackle the challenges raised by rival payments services.
We have reached out to WhatsApp regarding the issue and are yet to receive a statement from their global team.
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