A recent video that went viral on WhatsApp about how a person was tricked into downloading a third-party mobile application and digitally robbed of every penny in her bank account was disturbing to say the least.
Earlier this week, the driver of an Ola cab I was travelling in, narrated an incident that happened with him over a week ago. A customer paid him the cab fare of Rs 1,500 using the Paytm mobile application. However, the money vanished from his bank account after the payment was being done!
"No one has a clue what and how did it happen," he told me followed by asking if I'm going to be paying with Ola Money, Paytm or cash. The cab driver has lodged a complaint and is now hoping the issue to get resolved soon. "They are saying, it will take 40 days to figure out where has my money gone," he told me seemingly worried about the possibilities of the money coming back into his bank account.
These are not one-off incidents wherein someone was robbed of her/his hard earned money. A Google search on digital payments frauds/ scams will throw up numerous results of instances wherein people have been deceived and have eventually lost money from their bank accounts in some manner or the other. Apparently, there are instances wherein users have also lost money while transacting with Google Pay or G Pay.
What's more surprising is the fact that such frauds/ scams are far from dying away. A recent report by the Reserve Bank of India (RBI) said that the country's banking system detected frauds worth Rs 71,500 crore in the financial year 2018-19. I am sure, the number will be significantly higher in 2019-20 when the Indian central bank comes up with its report next year.
New tricks are being used at frequent intervals and the common Indian citizen who is anyway struggling to make ends meet is faced with the challenge of keeping her/his money safe in a bank account, a digital wallet or mobile payment applications that keep harping about their safety features while playing ignorant to the vulnerabilities.
At the receiving end always is the user of such applications who places faith in the ability (or inability) of companies running the digital payment systems. The burden is always passed on to the user who has to be vigilant all the time.
While regulators and the administration have issued communications creating awareness about such frauds and scams across various digital modes of transaction, it's not enough to arrest the problem. Even the so-called intelligent minds in the information technology space working with banking and financial institutions and digital payments companies aren't able to find ways to address this issue.
I recollect a discussion, earlier this year, with a senior executive heading the start-ups initiative at one of the top global IT companies operating in India. Their portfolio of 'unicorns in the making' comprised ventures instituted by IITians as well as IT industry experts with extensive experience in the financial technology space.
However, none were really working on offering a solution to this pressing issue about payments frauds/ scams. And mind you, the problem is not something that's master-minded by a tech wizard. These are very common people sitting in some remote location of rural India, using basic ways and means for phishing and skimming while going untracked.
What's really holding back tech companies from using their prowess in finding an effective solution to this problem? Is it so difficult to design systems and processes that ensure safety and security of savings in bank accounts and modes of digital payments used by citizens?
People want to graduate towards a cashless society but with no respite from frauds and scams, they are finding solace in the convenience of cash for everyday transactions.
What seemed to be an opportunity, post demonetisation, to promote digital transactions and payments in the country is slowly losing its sheen. Adding to the challenge are vulnerabilities in the system that’s shattering the common Indian citizen’s confidence every passing day. This makes me wonder, does a secure digital banking and payments system really exist or it's just a myth.
(The writer is a Mumbai-based independent business journalist and has extensively covered diversified consumer businesses over the last two decades. He can be reached at hello@ashishktiwari.com)
Earlier this week, the driver of an Ola cab I was travelling in, narrated an incident that happened with him over a week ago. A customer paid him the cab fare of Rs 1,500 using the Paytm mobile application. However, the money vanished from his bank account after the payment was being done!
"No one has a clue what and how did it happen," he told me followed by asking if I'm going to be paying with Ola Money, Paytm or cash. The cab driver has lodged a complaint and is now hoping the issue to get resolved soon. "They are saying, it will take 40 days to figure out where has my money gone," he told me seemingly worried about the possibilities of the money coming back into his bank account.
These are not one-off incidents wherein someone was robbed of her/his hard earned money. A Google search on digital payments frauds/ scams will throw up numerous results of instances wherein people have been deceived and have eventually lost money from their bank accounts in some manner or the other. Apparently, there are instances wherein users have also lost money while transacting with Google Pay or G Pay.
What's more surprising is the fact that such frauds/ scams are far from dying away. A recent report by the Reserve Bank of India (RBI) said that the country's banking system detected frauds worth Rs 71,500 crore in the financial year 2018-19. I am sure, the number will be significantly higher in 2019-20 when the Indian central bank comes up with its report next year.
New tricks are being used at frequent intervals and the common Indian citizen who is anyway struggling to make ends meet is faced with the challenge of keeping her/his money safe in a bank account, a digital wallet or mobile payment applications that keep harping about their safety features while playing ignorant to the vulnerabilities.
At the receiving end always is the user of such applications who places faith in the ability (or inability) of companies running the digital payment systems. The burden is always passed on to the user who has to be vigilant all the time.
While regulators and the administration have issued communications creating awareness about such frauds and scams across various digital modes of transaction, it's not enough to arrest the problem. Even the so-called intelligent minds in the information technology space working with banking and financial institutions and digital payments companies aren't able to find ways to address this issue.
I recollect a discussion, earlier this year, with a senior executive heading the start-ups initiative at one of the top global IT companies operating in India. Their portfolio of 'unicorns in the making' comprised ventures instituted by IITians as well as IT industry experts with extensive experience in the financial technology space.
However, none were really working on offering a solution to this pressing issue about payments frauds/ scams. And mind you, the problem is not something that's master-minded by a tech wizard. These are very common people sitting in some remote location of rural India, using basic ways and means for phishing and skimming while going untracked.
What's really holding back tech companies from using their prowess in finding an effective solution to this problem? Is it so difficult to design systems and processes that ensure safety and security of savings in bank accounts and modes of digital payments used by citizens?
People want to graduate towards a cashless society but with no respite from frauds and scams, they are finding solace in the convenience of cash for everyday transactions.
What seemed to be an opportunity, post demonetisation, to promote digital transactions and payments in the country is slowly losing its sheen. Adding to the challenge are vulnerabilities in the system that’s shattering the common Indian citizen’s confidence every passing day. This makes me wonder, does a secure digital banking and payments system really exist or it's just a myth.
(The writer is a Mumbai-based independent business journalist and has extensively covered diversified consumer businesses over the last two decades. He can be reached at hello@ashishktiwari.com)
