[Updated] Cashfree Denies Breach, Says Merchant Was At Fault

Update | 20:39 IST, April 4

Cashfree issued another statement in response to the article. “We would like to clarify that Cashfree Payments’ system was not breached. Basis the investigation, we have learned that unfortunately the merchant credentials were compromised from their end. We are closely working with the banking partner in recovering the lost amount,” said a company spokesperson.

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Gurugram-based Parviom Technologies was reportedly duped of INR 35 lakh due to an alleged cyber breach in the payment gateway of fintech platform Cashfree Payments.

In a police complaint filed against unknown people under sections 420 (cheating) of the Indian Penal Code and Sections 66 and 66-D of the IT Act on Friday (March 31), Ankit Rawat, national head of operations at Parviom Technologies, said that his company uses payment gateway of Cashfree Payments, which was breached, news agency PTI reported.

This resulted in unknown fraudsters getting unauthorised access to its systems via its dashboard. They made 35 Unified Payments Interface (UPI) transactions, as per the complaint. 

“Through the fraudulent transactions a total of around INR 35 Lakh were transferred in the different bank accounts,” Rawat was quoted as saying by the news agency.

The source of the cyber breach is yet to be ascertained.

“Cashfree Payments’ payment gateway was not breached,” said a company spokesperson.

Cashfree Payments, founded by Akash Sinha and Reeju Datta in 2015, operates a full-stack digital payments solution platform that enables businesses to collect payments and offers API banking solutions.

Earlier this year, the platform fired 80 employees as part of a restructuring exercise.

While the expansion of the fintech ecosystem over the last few years has improved the ease of digital transactions for businesses and individuals, the cases of cyber fraud have also seen a sharp increase with it. The finance ministry recently informed the Parliament that over 95,000 fraud incidents in UPI transactions were recorded in India in 2022-23, up from 77,000 such cases in 2020-21.

Recently, fintech uniform OneCard reported a cyber fraud case to the Delhi Police where it was duped by five fraudsters after they procured products worth INR 21.32 Lakh via credit cards. 

It is pertinent to note that India currently has over 30 Mn UPI users, and this number is expected to grow further in the coming days with improving internet and smartphone penetration. The government’s focus on enabling cross-border payments services via UPI is also expected to result in an increase in the number of UPI users.

As per the National Payments Corporation of India’s (NPCI) data, UPI recorded 753 Cr transactions worth INR 12.36 Lakh Cr ($150.65 Bn) in February.

This story has been updated with Cashfree ‘s statement.