Paytm Mall estimates fraud of up to Rs 10 crore in cashback scheme
Paytm Mall, the online marketplace owned and operated by Paytm Ecommerce Pvt. Ltd, has estimated that the range of seller fraud being investigated by E&Y could be Rs 5 crore to Rs 10 crore.
The audit by professional services firm E&Y is yet to conclude.
The company did not comment on the number of sellers delisted on the platform or the number of employees who have been suspended as a result of the findings.
Paytm founder Vijay Shekhar Sharma had previously admitted to a collusion between fraudulent third-party entities which were registered as sellers on the platform and some employees to gain from cash back schemes offered by the platform, according to the Press Trust of India.
In an earlier statement, the company mentioned that it was working with E&Y for periodic audits to weed out fraudulent sellers. “The platform continues to de-list fraud merchants and take strict action wherever needed… The E&Y partnership will also undertake audit & fraud prevention using both human and AI,” said the statement.
SoftBank- and Alibaba-backed Paytm Mall was valued at $1.6 billion when it last raised funding. It was hived off into a separate entity in 2017, from its payments arm and parent company One97. The e-commerce vertical, which garnered market share through its cash-back schemes, will now focus on online-to-offline transactions and on its wholesale arm to turn profitable. It was also reported that the company was in talks with eBay for an infusion of $150 million.
The company claimed that Paytm Mall has grown its O2O business by 200% in the last six months and was in the process of hiring 300 personnel in the coming months.