Paytm Mall pegs reported fraud at over Rs 10 crore

By

Isabelle Crossley

Published
May 15, 2019

The cash-back fraud detected at Paytm Mall has been valued by the business at over Rs 10 crore ($1.5 million) but Paytm’s founder and head Vijay Shekhar Sharma defended the cash-back business model as sustainable.

After reporting the detection of an internal fraud at Paytm Mall, the business announced on May 14 that the fraud totals at least Rs 10 crore, the Press Trust of India reported. Paytm has worked with Ernst & Young to audit the business and is currently taking action to prevent further fraud. However, the fraud has not led Sharma to doubt the cash-back model’s sustainability as he reported that he still believes in the business model. 

Sharma told the Press Trust of India that “tens” of employees have been fired over the fraud case and “hundreds” of non-branded sellers have been de-listed from the Paytm Mall platform. Sharma assured that a lower and more regulated number of sellers will create a “better ecosystem” for customers. 

Paytm has accused a group of Paytm Mall employees of colluding with a number of sellers to earn cash-back on fake orders. "After Diwali, what my team saw was that there were some small sellers who were getting large percentage of the cash-backs and we as a team asked our auditors to do a deeper audit," Sharma told reporters.