Chinese loan apps case: Paytm and Cashfree Payments react to ED raids – check what they say

Chinese loan apps case: Online payment aggregators Paytm and Cashfree Payments affirming the Enforcement Directorate raids in their premises said that they are supporting and co-operating with a national agency. The fintech companies in their statements said that they will ‘remain full complaint’ to the raids.

According to a Paytm spokesperson, “We are supporting law enforcement agencies, who are investigating a specific set of merchants.”

“The authorities reached out to us with directions to provide certain information about these merchants under scrutiny, to which we promptly responded and we continue to cooperate with the authorities and remain fully compliant,” the spokesperson of Paytm further stated.

Similarly, Cashfree Payments’ spokesperson said, “We extended our diligent co-operation to the ED operations, providing them the required and necessary information on the same day of enquiry.”

Our operations and on-boarding processes adhere to the PMLA (Prevention of Money Laundering Act) and KYC (Know Your Customers) directions, and will continue to do so, the spokesperson on Cashfree payments further said in its response on raids.

The Enforcement Directorate Saturday said it is conducting raids at Bengaluru premises of online payment gateways like Razorpay, Paytm and Cashfree as part of an ongoing probe against "illegal" instant smartphone-based loans "controlled" by Chinese persons, according to PTI report.

Meanwhile, Razorpay Spokesperson also clarified its stance on the issue. "A few of our merchants were being investigated by law enforcement about a year and a half back. As part of the ongoing investigation, the authorities requested additional information to help with the investigation. We have fully cooperated and shared KYC and other details. The authorities were satisfied by our due diligence process," said the company.

The modus operandi of these entities is that they use forged documents of Indians and make them dummy directors leading to generation of "proceeds of crime", the agency alleged.

"It has come to notice that the said entities were doing their suspected/illegal business through various merchant IDs/accounts held with payment gateways/banks."

"The premises of Razorpay Pvt Ltd, Cashfree Payments, Paytm Payment Services Ltd and entities controlled/operated by Chinese persons are covered in the search operation," the ED said.

The ED said its money laundering case is based on at least 18 FIRs filed by the Bengaluru Police cyber crime station against "numerous entities/persons in connection with their involvement in extortion and harassment of the public who had availed small amount of loans through the mobile apps being run by those entities/persons."