India's Paytm has pulled its POS app a day after its launch, amid security concerns.
Paytm launched a new app called Paytm POS on Wednesday to address the lack of availability of POS machines in India. Its founder, Vijay Shekhar Sharma, expected over 10 million downloads of the Paytm POS app over the weekend.
However, last night the company announced that it was withdrawing the app, a decision taken after discussions with various stakeholders who claim that the app's launch should have been more secure. Shortly after its launch, payment network giants MasterCard and Visa had raised concerns about how the Paytm POS app handled user data.
"Based on some suggestions from the industry, we decided to add additional certifications and features before making it available to merchants," the company wrote in a post, adding that it would relaunch the app, with some modifications, without sharing a firm timeline.
India has around 1.5 million card machines and over 700 million with debit and credit cards. The Paytm POS app was designed to mimic a terminal machine.
Shortly after its announcement, however, people started raising concerns about the security of how the Paytm POS app handles bank credentials.
Customers had to enter their bank credentials on the smartphone. Paytm, however, clarified in its post that it did not store any card details on its app or servers and that transactions were made on the website . The app also followed the two-factor authentication guidelines mandated by local laws.
Paytm and other e-payment providers have been in the spotlight in India lately. Amid the domestic government's decision to phase out much of the cash, contactless payment apps have seen an astronomical increase in new users and daily transactions.
