Industry veterans stand in support of Paytm’s appeal for fair play in payments

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New Delhi [India]: Industry veterans have come out in full support of Paytm CEO and founder, Vijay Shekhar Sharma, in his appeal for fair play in payments to the National Payments Corporation of India (NPCI), against the beta launch of WhatsApp’s Unified Payments Interface (UPI) service.

“We support NPCI in all its endeavors for facilitating digital payments in the country, but we hope that a level playing field is ensured by India’s premier financial institution to all the players including banks and non-banks; enabling interoperable, convenient and secure platforms based on open standards. All payment apps need to be fully compliant with all the guidelines drafted for its usage to ensure a fair play for all the stakeholders,” said President, Internet and Mobile Association of India, Subho Ray.

Executive Director, Seedfund, Shailesh Vikram Singh echoed Ray’s opinion and urged the government to look into the matter.

“The biggest challenge to India’s growth story remains regulatory uncertainty and an uneven playing field. The latest WhatsApp UPI controversy due to discriminatory NPCI policies has amplified this phenomenon. Facebook was earlier forced to retreat on its plan to own India’s internet traffic due to opposition to Free Basics. It has now used the same tried and tested strategy of using regulation to own the payment space in India by having policies changed as per its convenience,” Singh said.

“In the Internet space where one second delay (Amazon loses billion in sale due to one second delay) or friction has the potential to change the fortunes of business, avoiding the requirement of login only for WhatsApp gives the company a big unfair advantage. A beta testing with earlier 10 million customers which has now been reduced to one million also exposes a big chunk of Indian citizens to a financial risk. The government must look into this and ensure a level playing field for all Payments Service Providers (PSP), especially if we want the Indian growth story to continue,” he added.

Meanwhile, founding partner, India Quotient, Anand Lunia went as far to call it a sepoy mutiny syndrome.

“We are clearly witnessing two symptoms of sepoy syndrome here, the white man’s company can do no wrong and an Indian company complaining of lack of fair play is just been blamed to be scared of loss of market share. I am shocked there are hardly any comments on the merit of the case, just the assumption that all Indian CEOs are desperate for protection and can’t challenge foreign players with deep pockets. Interestingly, the same people who are unhappy with regulators would not hear a word against the regulator in this case,” said Lunia.

Earlier last week, Paytm founder Vijay Shekhar Sharma had alleged that Facebook-owned WhatsApp’s UPI payment platform will pose security risks for consumers and said that it is not in compliance with the guidelines.

“After failing to win war against India’s open internet with cheap tricks of free basics, Facebook is again in play. Killing beautiful open UPI system with its custom close garden implementation. I am surprised, champions of open @India_Stack , let it happen !,” Sharma wrote on Twitter.

He alleged that Facebook had “arm-twisted” UPI to derive the benefit, according to media reports.

Sharma had said that he will approach the NPCI, which has developed the UPI system, and even higher authorities, if needed, to highlight this issue.

The NPCI in a statement on February 16 had that said that it will allow the full-scale public launch of any UPI-enabled app only if it fulfills the principles of interoperability.

“Currently, NPCI has given its consent to roll out WhatsApp Bharat Interface for Money UPI beta launch with limited user base of one million and low per-transaction limit. Four banks will join the multi-bank BHIM UPI model in phases (in the coming weeks) and full feature product shall be released after the beta test is successful,” the statement said.

Paytm welcomed the statement by NPCI and said that it addresses the concerns of interoperability violation, which were raised by the company.

“We welcome this statement by NPCI. It addresses the concerns of interoperability violation that we had raised. It also clarifies that the trial has been restricted to one million users, though we feel that a product with the stated violations could have been tried out amongst a much smaller base. We are still concerned that this statement is silent on the critical issue of safety/security of a financial transaction through UPI, where consumers need to mandatory sign-in with username and password. This violation is fundamental and very serious,” a Paytm spokesperson said.

However, the company believes that NPCI is also silent on certain pressing concerns.

“WhatsApp must implement login and password like all other BHIM UPI apps. This statement is also silent on other issues such as the requirement to send SMS notifications for every UPI transaction. We hope that future roll-out will be fully compliant with all the guidelines. We wait to hear NPCI views on some of these missing aspects,” the spokesperson added.

Around the first week of February, WhatsApp tested a new payments feature in the app’s beta version in India to allow people to send money to other WhatsApp users, excluding merchant accounts.

WhatsApp had been working on support for a payments feature for some time, with support by State Bank of India, ICICI Bank, HDFC Bank, and Axis Bank. (ANI)