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Digital Payment Startups Unfamiliar with Cyber Risks

The government’s demonetisation drive led to digital wallet and there is seen an unprecedented rise in their usage and popularity because people are using it from buying groceries and vegetables to local travel. After demonetization, startups are establishing digital shops, but without having any type of knowledge about security risks. This threat is very dangerous especially when there is a lack of infrastructure as well as legislation to fight against cyber criminals in the country. This means that as India is embracing a cashless economy, there is a need to consider security risks which are involved. As per Vishak Raman, Senior Regional Director for India and SAARC, the rapid shift to digital payment will increase the cyber security dangers such as theft and fraud.

Paytm, which is an Indian e-commerce portal started its business by providing mobile recharging then added bill payment and e-commerce with products available on Flipkart, Snapdeal and Amazon. Furthermore, in the year 2015, it added booking bus travel, registered over seven million transactions of Rs. 1.2 billion. Paytm claims to follow effective risk management for secure digital payment. However, with the Central Bureau of Investigation’s (CBI) complaint  for claiming fraudulent refunds worth Rs 6.15 lakh from Paytm against 15 people, payment gateway required  to think about the security once again. Apart from this payment solution provider, MobiKwik, which offered “Lite” late last month registered over two million downloads within just the first two days of this offer. Furthermore, PayU has witnessed an increase in its daily transactions from Rs. 1.2 million to Rs. 2.5 million. The provider added that this increase is the result of demonetisation.

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By witnessing the demand for mobile wallet, cyber experts say that there will be newer forms of vulnerabilities in these payment gateways. Apparently, with the growing digitisation, there should be a huge responsibility to safeguard transactions against cyber criminals.

Hackers Are Attacking Your Money in E-Wallets

Hackers firstly create multiple fake accounts in order to collect the money in small amounts and attack those who are not well-versed with digitizing. In other words, people who are digital newbies by psychological manipulation. They breach the server in order to steal the data. Threats are becoming more pervasive as well as frequent in India and thus organisations which lack effective defences against ransomware are slowly and steadily becoming aware about the requirement for effective protection. However, it should be considered that the protection is the combination of intelligence, expertise and technology to not only detect and prevent, but to respond to attacks.

In the year 2016, India came across numerous cyber security incidents, which ranges from targeted attacks on government organisations to ATM malware attacks. When it comes to combat major risks  associated with cashless transactions and putting private information of citizens into digital space then India belongs to the category of vulnerable. Hence, there is no exaggeration in saying that startups should prepare themselves to tackle security issues.