CAIT advises Indian Businesses to avoid Foreign Payment Apps

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.