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CAIT advises Indian Businesses to avoid Foreign Payment Apps


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The Confederation of All India Traders (CAIT) advises Indian businesses to avoid foreign payment apps.

Background:

  • CAIT Secretary General Praveen Khandelwal emphasizes sticking to Indian payment solutions.
  • CAIT’s advisory follows RBI’s restrictions on Paytm, prompting concerns among traders.

CAIT’s Advice:

  • Traders urged to choose Unified Payments Interface (UPI) or Indian bank apps over foreign-owned ones.
  • Focus on supporting India’s ‘Make in India’ initiative.

RBI’s Actions and Paytm’s Situation:

  • RBI imposed limitations on Paytm Payments Bank (PPBL) from accepting deposits or conducting credit transactions.
  • Paytm faces security apprehensions post-RBI’s measures.
  • Paytm is widely utilized by Indian merchants and customers for transactions.

Foreign Ownership of Competing Apps:

  • PhonePe, owned by Walmart, and Google Pay, based in California, pose competition to Paytm.
  • Paytm’s CEO Vijay Shekhar Sharma holds the largest share in the company.

Paytm’s Response and Operational Continuity:

  • Paytm assures the continuation of its services beyond the imposed deadline.
  • The company shifts its nodal account to Axis Bank to ensure seamless transactions.
  • Made-in-India devices and QR code systems will remain unaffected.

RBI’s Concerns and Probe:

  • RBI’s actions stemmed from a probe citing money laundering and KYC norm violations.
  • The move signifies the regulator’s vigilance over financial security.

Concerns Raised and Government Response:

  • Parliamentarian Supriya Sule highlights concerns over foreign payment platforms.
  • Calls for government intervention to address potential risks like money laundering.

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