Mobile wallet companies, expanding rapidly to cash in on the opportunity of the government’s push to scale up digitisation, are not taking adequate insurance cover against an obvious risk of cyber attacks and that could put their customers’ money in jeopardy in case of attack, industry insiders said.”Most wallet companies do not have a risk mitigation plan and do not have cyber insurance in place, which makes them vulnerable to huge losses in case of cyber attacks,” said Amit Agarwal, head, financial lines, JLT Independent Insurance Brokers.
As more transactions shift online, these companies become sitting ducks for hackers. Just a few days back the country’s largest mobile wallet company Paytm lost about Rs 6 lakh through cheating by a few customers where insider involvement is suspected.
“Such instances show that financial technology players need to become more careful around threats and in such cases they ne ed to develop a strong risk mitigation plan,” said Agarwal.
“Mobile wallet companies are not making profits in most cases, then how do they plan to compensate customers in case they lose the money in their wallets to a hack?” said another senior executive with an insurance firm which works with mobile wallet companies as well. “Average balance in a mobile wallet is less, hence if something goes wrong, we compensate them from our resources,” said a chief executive with a payments company.
Industry executives say companies adhere to strict security protocols as prescribed by RBI and do security audits.