Paytm withdraws its in-app POS feature over security concerns

Just after a day of launching its in-app point-of-sale feature, Paytm has withdrawn the feature following security concerns raised by payment networks Visa and Mastercard.

“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,” said the company in an official blog post.

Paytm, on Wednesday, updated its app with Point-of-Sale (POS) capabilities, in effect allowing merchants to accept all card payments including Rupay, Visa, MasterCard and Maestro through their Paytm app. But it got soon embroiled in criticism over the safety and security perspectives of the feature, including the potential misuse of user's card data.

Meanwhile, Alibaba-backed Paytm also looks all set to launch its payments bank. Ahead of the launch, the company has raised around Rs 220 crore in funding. Notably, Paytm was among the 11 recipients of the payment bank license issued by RBI earlier this year.

As per Paytm’s founder Vijay Shekhar Sharma, out of the Rs. 220 crore raised by the company, he himself has invested Rs 112, while the rest of the money comes from other investors via One97 Communications.

While Paytm’s payments bank is yet to launch, Airtel has already launched its payment bank pilot service in Rajasthan. Deposits made by the user in savings accounts will be eligible for an interest rate of 7.25 percent per annum.