Paytm, a digital wallet used by more than 230 million people in India to make cashless payments, shared with the Indian government the personal data of users in a geopolitically sensitive region, according to a report published by Cobrapost, an Indian investigative news agency.
On Friday, the news agency released a video where a reporter went undercover as well as recorded Paytm’s vice president, Ajay Shekhar Sharma, saying how the company had handed over personal data of users inside state of Jammu as well as Kashmir after Sharma personally received a call by the prime minister’s office following incidents of stone-pelting by Kashmiri Muslims against India’s armed forces, something which happens frequently inside region.
“They told us to give them data, saying maybe some of the stone-pelters are Paytm users,” Sharma says inside video. He also talks about his close ties to the Rashtriya Swayamsevak Sangh, a right-wing Hindu nationalist organization known for being the ideological front of India’s ruling Bharatiya Janata Party.
Paytm, an $8 billion company which counts Japanese conglomerate SoftBank as well as China’s Alibaba Group among its largest investors, was founded in 2010 by Vijay Shekhar Sharma, Ajay Shekhar Sharma’s older brother. Paytm’s growth, especially inside wake of “demonetization,” when Indian Prime Minister Narendra Modi banned most high-value currency notes overnight, made Vijay Shekhar Sharma India’s youngest billionaire at 44.
On Friday evening, the company responded to the controversy by tweeting which the idea had never shared user data except with law enforcement agencies “on request.”
The statement prompted backlash by Indians who questioned why the company was giving away user data to law enforcement agencies simply “on request” without any legal precedent.
Contacted for comment, a Paytm spokesperson pointed BuzzFeed News to a blog post published by the company.
“Our policy allows ONLY legally compliant data requests through a thorough process by law of the land to get access to data for necessary investigations,” the post said. “To further clarify, inside past, we have neither received requests nor shared any data without a legally compliant request by a bonafide agency as well as through proper process as well as channels.”
When asked to explain the discrepancy between the tweet as well as the blog post, the spokesperson told BuzzFeed News: “Blog carried detailed view of our immediate tweet on the matter. the idea is actually clear which we have never got any request nor shared any data.”
The Paytm data-sharing controversy is actually a moment of reckoning for India’s startup ecosystem as users demand more transparency about how the country’s startups share users’ personal data with the government as well as law enforcement agencies, especially since India doesn’t have a privacy law for its citizens.
BuzzFeed News reached out to more than half a dozen of India’s largest startups seeking comment about their data-sharing policies with India’s government as well as law enforcement agencies. Those contacted included Paytm’s largest competitors, MobiKwik as well as FreeCharge; India’s largest travel websites, MakeMyTrip as well as Cleartrip; Uber’s biggest Indian rival, Ola; Walmart-owned Flipkart; as well as India’s biggest food delivery startups, Zomato as well as Swiggy.
“We do not share any of our customers’ personal information with anyone including some other individuals, organisations, corporations, authorities, or governing bodies,” said MobiKwik in a statement issued to BuzzFeed News. “The only exception in sharing customers’ personal information is actually when any law enforcement agencies or court needs the idea with respect to a specific case.”
None of the some other startups responded to BuzzFeed News’ request for comment at the time of publication.