Digital wallets: I will dump cash for Paytm only when these glaring issues are addressed

Paytm is positioning itself as the digital wallet service for our nation. In a post-demonetisation world, it makes sense for a digital wallet service like Paytm to do this, but I don’t think that mere posturing is enough.

Paytm’s CEO Vijay Shekhar Sharma has a lot to answer for if he hopes to make the company a staple of India’s digital future.

Why are we still seeing outages?

Demonetisation happened over a month ago and with 86 percent of our currency now worthless, a massive rise in digital transactions was inevitable. Why is it that even today, Paytm still doesn’t have the server capacity in place to deal with the increasing demand? Surely, they’re not so blind that they didn’t see that demand coming.

How many people facing continuous outage of @Uber_BLR & @Paytm

— Priyashmita (@priyashmita) December 1, 2016

People are understandably frustrated and outraged at these outages and “heavy server load” is no excuse for a lack of sufficient infrastructure. I want a service I can rely on. Always.

Oh, and they had to pull the iOS app because it was buggy.

Why can’t I pay my hospital bills?

Heading down to the chaiwala to get my daily cup of piping hot chai is nice enough, but why can’t I pay my auto-driver yet? I can’t pay my local hospital bill and I can’t pay for public transport with Paytm. When is this going to happen? Why isn’t this a priority yet?

Sure, you have a bazillion “merchants” on board, but unless I can pay for essential services with Paytm. Why will I ever dump my wallet if I can’t do that?

Where’s the security?

If someone manages to grab my unlocked phone, he can steal all the money from my wallet and I’d be none the wiser? What’s Paytm doing about that? For a company that’s been around since 2010, the lack of basic security is very frustrating.

when will u introduce added security feature in #iOS app or only #android apps r vulnerable?

— vips (@vermasvipin) December 11, 2016

Why isn’t there a second layer of authentication? Why aren’t I getting a daily or weekly account statement?

My bank calls me up if it sees unusual activity in my account; will Paytm ever do that? How do I trust my money with a service like this?

If you have some questions about Paytm and how it works, the following explanation should help you out a bit. You can also check out Paytm’s official website here.

What is Paytm?

It’s a digital wallet service and e-commerce platform (like Amazon) that lets you transact digitally. A customer is not charged a transaction fee if it is within the Paytm network.

How does it work?

Digital wallet services usually maintain escrow accounts with a ledger system. Individual ledgers are maintained for each user. So when you create an account, a ledger with your wallet limit is created.

When you perform a transaction within the Paytm network, a note is made in your ledger of the amount to be debited. A corresponding note in the recipients ledger records that the amount has been credited. In this case, no actual money has changed hands.

When a merchant (like a shop) registers with Paytm, the merchant must submit KYC documents to Paytm. These documents are used to create a new escrow account for that merchant. When you pay a merchant via Paytm (or vice versa), money is debited from Paytm’s escrow account and transferred to the merchant’s escrow account.

What happens when I click “pay”?

Paytm uses various methods to authenticate the transaction from both ends. That code that is scanned when making or receiving a payment is unique to you or the merchant and acts as a signature to verify the transaction.

Once verified, the transaction is approved and the corresponding ledgers are updated. As mentioned earlier, money may be transferred to another escrow account in some cases.

Can I transfer the money to my bank account?

Yes, and there are no charges for the same. However, Paytm reserves the right to change those fees at its discretion and Paytm did charge a 1-4 percent fee earlier.

What if I accidentally transfer Rs 20,000 instead of Rs 2,000?

If you messed up a transaction, you’re on your own. Paytm disavows all responsibility towards payments and purchases made. In its own words, Paytm is a “reseller only”. Your best bet is to attempt to resolve the matter yourself. If you’re lucky, the company may choose to help you out. If not, you’re on your own.

@Uber hi I am stuck with a persistent negative balance despite accidentally paying twice. This happened after yesterday's @Paytm outage.

— Ankur Mishra (@anmishra) July 10, 2015

Paytm only guarantees transactions between you and Paytm.