Digital payments market unaffected by Paytm issue: CAIT

Betting on fintech: The Reserve Bank of India’s restrictions on Paytm Payments Bank will not result in a disruption in India’s digital payment ecosystem, Confederation of All India Traders (CAIT) has said.

CAIT Secretary General Praveen Khandelwal also rejected apprehensions of reverting to a cash system, exuberating the confidence of traders in the digital payment system “built over the years.”

Pointing towards the other options in the market, Khandelwal said the digital payment ecosystem of the country will become stronger on the back of other digital payment players taking “aggressive steps” for more awareness. 

“There are several options available in the market, and people can freely migrate to any other option of their choice. There will be no disruption in the digital payment ecosystem of the country; rather, it will become stronger,” Khandelwal added, citing an in-depth study of the matter undertaken by the trading body.

Regarding apprehensions on Paytm, CAIT said the mass confusion among the trading community regarding their money remaining secure in the several  Paytm offerings has given way to questions.

These span from potential data breaches and security lapses within the Paytm app, to scrutiny from regulatory authorities and legal and financial repercussions for Paytm

On the RBI’s action, CAIT stated that companies across sectors must understand that regardless of their size, the law will take its course if anyone dares to flout it, adding that “India is not a banana republic.”

“Paytm has been issued notices by the RBI year on year… 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,” CAIT said, on the RBI action.

The trade body on Sunday had advised traders to switch from Paytm to other payment apps, and also raised concerns on the security and continuity of financial services provided by the platform.