Paypal Fraud Case Study: Viral

2. Viral Distribution
When PayPal launched in the late 1990s, it encouraged existing users to send money to non users. When users sent money to their friends and family members (that were not on PayPal), PayPal sent them an email saying “Collect $$ by signing up for PayPal". This give non-users a far more compelling reason to join PayPal than any direct advertising or PR efforts could have and generated a massive amount of viral distribution for PayPal.
PayTm has copied this approach and has probably reaped the rich rewards à la PayPal.
Surprisingly, PayTm’s competitors haven't followed this approach. They insist that payments can be made only to people that have already signed up to their e-wallets. They probably think sending money to a non-user would be tantamount to putting the cart before the horse.

The scam involved 15 customers who had colluded with some of PayTm’s executives, costing the company around Rs 6 lakh. Though the incidents occurred on PayTm’s e-commerce portal, not its payment app, the news prompted increased scrutiny of the startup.

Technical woes
PayTm has also been struggling to manage the sudden spike in traffic on its mobile app. On December 20, the app faced a technical outage that prevented customers from making transactions.
“At the evening peak hour today, we witnessed three times the traffic of the last peak that we handled,” a company spokesperson told the Press Trust of India. “As we continue to route the traffic to new servers and install additional capacity, certain customers are facing (a) time-out.”
But things only got worse. On December 21, PayTm’s app reportedly disappeared from the Apple Store for several hours. The company said it had de-listed the app due to technical issues and was waiting for the updated version to be approved by Apple.

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