Paytm founder: ‘I’m paranoid about scale. We don’t want to be spread too thin.’

Paytm founder Vijay Shekhar Sharma. Photo credit: Wikipedia.

“What are you paranoid about in this huge window of opportunity that has suddenly opened for you?” I asked Vijay Shekhar Sharma, founder and CEO of Paytm, in an interview a couple of days ago in Delhi. This was right after he had launched a new feature in the Paytm app to solve the problem of card payments in India.

The best thing is to get into more things; the dumbest thing is to get into more things.

The Alibaba-backed company has been seeing half a million new users on its digital wallet every day since the Indian prime minister Narendra Modi suddenly withdrew high denomination currency notes on the evening of November 8. That, coupled with stringent caps on the amounts that can be withdrawn from banks, has been a godsend for Paytm. But it also faces new challenges in handling the rapid scaling up and new possibilities which have opened up.

“I’m paranoid about tech scale, process scale, people scale… While we’re growing this, we shouldn’t be spread too thin,” Vijay said in reply to my question. “The best thing is to get into more things; the dumbest thing is to get into more things,” is how he summed up his dilemma, which most startups would consider a happy problem to have.

He wouldn’t have imagined it would be so prophetic so soon.

Mobile POS put on hold

Paytm founder Vijay Shekhar Sharma launching the in-app POS feature. Photo credit: Tech in Asia.

Yesterday evening, Paytm had to put on hold its new feature enabling mom-and-pop stores as well as all service providers – from the repairs man to the housemaid – to accept card payments without the need for card-swiping machines. “Based on some suggestions from the industry, we have decided to add additional certifications and features before making it available to merchants. We will re-launch this product as soon as we have updated the product,” Paytm said in a blog post.

Mastercard and Visa are reported to have raised a red flag over the risks of entering card details into a merchant’s Paytm app. On its part, Paytm has said the app doesn’t store card details and the transaction is completed on a bank’s page with 2-factor authentication. But this cut no ice with the card companies.

Tech in Asia readers also pointed out other avenues for fraud after the launch of Paytm’s so-called mobile POS (point-of-sale machine). An app masquerading as Paytm could capture card details, some said. It’s not clear how this would be different from phishing risks on shopping websites, but possibly the mass use of a mobile payments app would take it to a different level of user who is not as digitally savvy as netizens.

Paytm vs card companies

Wheels within wheels