Paytm Mall has reportedly unearthed a fraud of ₹5 to ₹10 crore, after the probe by auditing giant EY.

has reportedly unearthed a fraud of ₹5 to ₹10 crore, after the probe by auditing giant EY. Few of Paytm Mall employees worked with third party vendors to avail cashback offers, say reports.

The company had earlier said that it has partnered with E&Y to build a technology driven fraud prevention system.

Vijay Shekhar Sharma

Paytm



In what could possibly be one of the biggest blows for every Indian startup’s favourite cashback scheme, Paytm Mall has reportedly unearthed a fraud of ₹10 crore. According to reports, few of Paytm Mall employees worked with third party vendors to avail cashback offers."After Diwali, what my team saw was that there were some small sellers who were getting a large percentage of the cashbacks and we as a team asked our auditors to do a deeper audit," Paytm foundertold reporters at a press conference in Mumbai. The event was held to launch Paytm’s cashback card driven by Citibank.Mall has fired about 10 employees and delisted over 100 vendors from its platform, according to one report. Paytm Mall, however, clarified later that fraud was in the range of ₹5-10 crores. The company had earlier said that it has partnered with E&Y to build a technology-driven fraud prevention system. The company had released an official statement regarding its partnership with E&Y, which will help build Paytm Mall a secure network for its users.In the Indian e-commerce industry, while cashback has been a boon to bring on board a huge number of users, it has also proved to be a bane for companies that are struggling with losses due to these offers. In the same breath, Sharma insisted that the cashback model remains sustainable.Paytm Mall had aggressively grown to bring on board many vendors in its fight against the likes of Flipkart and Amazon. However, it had run into trouble with huge losses and there were reports about Paytm Mall shutting down. In an earlier interview with Business Insider , Sharma had said that the vertical was back on track and having switched to the Online to Offline (O2O) model, they had offloaded multiple vendors from the Paytm Mall platform.