Wary of fake apps, many shopkeepers shy away from digital payment

With the growing popularity of payment apps based on Unified Payments Interface (UPI), a subsidiary of National Payments Corporation of India (NPCI), scamsters are on the hunt.

The phenomenon of fake Paytm apps ripping off shopkeepers has become frequent in recent times. For small-time business owners like Raghu, who runs a tea shop in Immadihalli suburb of Whitefield on the outskirts of Bengaluru, fraudulent transactions are a matter of grave concern. 

"Some people download fake Paytm app and show it to us. The app shows the money has been sent but, in fact, it never gets credited to our bank accounts," he explained.

"There was this one time I had to beat up a few boys who were trying to trick me. That is why a lot of shopkeepers here are reluctant to use payment apps," said Raghu.

The NPCI saw a revenue increase of about Rs 180 crore in the financial year 2017-18 over the previous fiscal year. As of April 2019, 144 banks are linked to the UPI with over 7,800 transactions amounting to about Rs 1.5 lakh crore. 

A report published in January said that UPI transactions to the tune of more than Rs 1 trillion were conducted in December last year, an increase of 18 per cent over November.

As India is acclimatising itself to UPI-based payment systems, there are many who resort to conning shopkeepers with fake apps. Apps such as Spoof PayAtm are unavailable for download on Google's Play Store, mostly because they violate the company's content policy. However, the app makes rounds of the internet on different independent app download websites. The app imitates Paytm's transaction screen to mimic a successful transaction.

The description on the app's tutorial page reads, "This is a fun app, don't misuse [sic] it for any illegal or unethical activities, if so the developer will not be responsible."

Hitesh Verma, the developer of Spoof Paytm, claimed that he made the app only to play a prank on his friends and not for fraudulent transactions. "I tried my best to remove it, but I guess you can't erase anything from the internet," he told 101Reporters when asked to comment on its use for illegal transactions.

Bengaluru-based techie Rohan (name changed) shared how he would use such apps to pull the wool over shopkeepers' eyes during his college days. "We once conned a local bakery of Rs 3,000. It used to be easy. It is easy if there's an SMS service integrated with such fake apps that sends a fake message, claiming that the money has been credited to the shopkeeper's account in realtime," he said.

Digital pitfalls

The government has been pushing for digital payments as part of its Digital India initiative. The NPCI has slashed transaction fee on small transactions up to Rs 1,000. Experts claim the move would help consumers and business-owners in the long run. However, owners of small businesses are unaware of such developments.

"Once someone scammed me of Rs 20 rupees," claimed Pushpendra, owner of a panipuri kiosk. He added that there are many young customers who only transact online now and he wouldn't want to lose them, but the fear of being scammed has kept him away.

Paytm, when made aware of such fraudulent transaction, commented that they are unable to trace the user in their system and advised to "seek legal/police help" in cases of fraud. In September 2018, two students were held in Tamil Nadu for a fraudulent transaction amounting to Rs 30,000. Similar cases have been reported from Hyderabad as well.

Only a few scamsters get reported by attentive users, but a lot of them manage to go scot-free. 

Shubham Siddhartha, a business development associate at Byju's, believes that the onus is on the companies to make sure that all hindrances in their way of expanding operations are cleared.

"For large companies like Paytm that have a lot of resources, it is crucial that they make themselves available to the owners of small business. Cashless transaction is going to expand to third-tier cities. 

"It is important that there is enough awareness. The companies must address security concerns, if any, and open help centres to ease up communication and facilitate the development of business," Siddhartha said.

Apart from technology-enabled conning, shopkeepers also fall prey to culprits who use these apps as a plot device to dupe them. Kulayappa, another Whitefield-based shopkeeper in his early 50s, said once a customer owed him Rs 3,300 but his app-based payment failed and he didn't have cash, so he took off on the pretext of withdrawing cash and didn't return. Since then, whenever such a situation occurs, Kulayappa asks his customers to park their two-wheeler in front of his shop and go on foot to get cash.

Since such incidents are not uncommon, many shopkeepers are becoming wary of adopting to UPI-based payments.

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