Paytm hit with 10 cr fraud

Paytm has unearthed an over Rs 10 crore fraud following a probe into a large percentage of cash back earned by small merchants, and de-listed hundreds of sellers apart from sacking many employees. The company, which reportedly engaged consultancy firm EY to conduct the audit, found out that some sellers were colluding with junior employees to earn the cashback. The overall size of the fraud is in “double digits”, which is “Rs 10 crore for sure. According to recent reports, Some employees of the Alibaba-backed company allegedly worked with third-party vendors and created fake orders to siphon off cashback offer

It is understood that a platform like Paytm earns both through the merchant discount rate paid for processing transactions and may get up to 15 percent of the cover charge when a transaction like a movie ticket sale happens, making it comfortable to offer the cashback. Meanwhile, in what can be seen as a turnaround in his position, players like Facebook-controlled WhatsApp are welcome on the payments landscape.

He hinted that the company is not on the lookout for any fresh capital when asked about valuations for the next round of funding, and added that it continues to carry a war chest of money necessary for two years of growth.