Online Safety Community

RBI's latest norms makes Paytm happy, leaves Google, Amazon upset

digital payment industry could be thrown into disarray due to the demand by the Reserve Bank of India (RBI) that all user data be stored within the country, fears an industry grouping, which has termed the decision as “heavy-handed”, even as others, including the country’s largest digital payment provider Paytm, have hailed the move.

In a bid to narrow the growing schism, the industry is planning to send a formal representation to the regulator highlighting its concerns, a top official told ET.

“We are trying to build a consensus on the issue,” said the person adding that the representation to the central bank will be ready this week.

RBI on April 6, mandated all payment companies — global and local—to set up data storage facilities within India by October. The stringent six-month deadline has attracted the ire of several sections of the industry that fear it will lead to a disruption of well-established global networks as well as dampen new innovation in the sector.

,-6fmgIvrwEONRfJ-drj-cg 942w, 150w, 300w, 768w" sizes="(max-width: 471px) 100vw, 471px" width="471" height="314" />

“What RBI is doing is heavyhandedness. A regulator should not bring about such fundamental changes without consultation with a cross section of affected parties,” said Subho Ray, president of Internet and Mobile Association of India (IAMAI).

RBI in its notification said that while the payments ecosystem had grown in India, it needed “unfettered supervisory access” to transaction data to ensure better monitoring of the payment ecosystem. The only exception it gave was for foreign transactions, where the data generated overseas could be stored outside India.

Global technology giants such as Google which offers payment service Tez in India, online retail giant Amazon’s Amazon Pay as well as the payment service from Facebook’s WhatsApp, which leverage the Unified Payments Interface (UPI) —the platform for bank-to-bank micro payments-—could be affected by the move, said industry members, as Indian banks would insist on local hosting of data in order to partner with these firms.

A senior banker, who works very closely on the integration of these platforms with UPI, told ET that they have “had discussions with them ( global technology corporations) already. As of now our stand is that if it affects the payments ecosystem it will affect every global player equally, it will not affect UPI or any payment system alone.”

“We are hoping to get more clarifications from the regulator,” the banker said.

RBI_norms_image 1188w, 150w, 300w, 768w, 1024w" sizes="(max-width: 594px) 100vw, 594px" width="594" height="297" />

Google did not reply to ET’s queries. A spokesperson for WhatsApp said the company would not comment as it is reviewing the RBI mandate.

“The problem is not with data localisation but with the process which is being used to implement it,” said Ray of IAMAI, which counts American technology corporations such as Google and Facebook as members.

In contrast, India’s largest digital payment provider Paytm, which is a member of Payments Council of India, which is a part of IAMAI, believes the mandate has come at the right time when payment companies are witnessing unprecedented growth.

“The directive to process and store data only in India will help curb the potential misuse and enable active regulatory monitoring. It will definitely boost customers’ confidence in moving to digital payments without worrying about the security of their personal data,” said Kiran Vasireddy, chief operating officer of Paytm.

Data replication
India has been rocked in recent days by claims that a UK-based analytics firm Cambridge Analytica sourced personal data of users from social network site Facebook without consent.

Paytm, which in addition to offering digital payments is also a licensed payment bank, is already required by law to store all user data within the country.

IAMAI is of the view that the payments industry requires “some kind of data replication,” whereas the RBI is demanding that data be kept only in India. “There is a concept called dual locations, in any case data is kept in multiple locations,” said IAMAI’s Ray.

Bankers that ET spoke to also said that “even if the regulator would have mandated storing data in India along with other data centres for the purpose of scrutiny, it would have been understandable. But to restrict storage in India only is a bigger challenge at this point of time.”

Views: 11


You need to be a member of Online Safety Community to add comments!

Join Online Safety Community

Take our poll!

Take our poll!

Latest Activity

Mark Nilson posted events
2 hours ago
Training Doyens posted an event

HR Practices in Terminating Employees at 26468 E Walker Dr, Aurora, Colorado 80016

June 12, 2018 from 1pm to 2pm
OVERVIEWEmployers must terminate employees from time to time in order to run their businesses effectively.In today’s litigious world, terminating employees is an emotional and legal minefield for managers and supervisors.Even subtle differences in preparing for and conducting terminations can impact greatly the level of legal risk, and whether an employer faces a claim that may cost six figures (or more) in potential liabilities and litigation costs.This webinar will give you knowledge on basic…See More
3 hours ago
Mark Nilson posted events
Training Doyens posted events


Python Condition Objects Tutorial in 2018 1 Reply

If you have knowledge of other programming languages, then you would know the importance of conditional statements. Conditional statements are required for taking decisions. Whenever we operate the…Continue

Tags: course, certification, training, languages, programming

Started by Elena Lauren. Last reply by Jim Chesters on Tuesday.

Power BI Visualization Types

Visualizations in Power BI displays the visual insights from a data. In power bi service a visual can be pinned from reports to create dashboards. Visuals are used in reports.List of visualizations…Continue


Started by Azharuddin May 15.

Automation Anywhere. How do I pick a value from dropdown 1 Reply

Automation Anywhere. How do I pick a value from dropdown. I tried 'set text' from a copied variable. Its very slow, and also doesnt…Continue

Tags: anywhere, automation

Started by emmablisa. Last reply by venkatesh Mar 29.

Agile overcome common software security challenges

Paradoxically, security is a negative goal. To secure something, you must understand how insecure it is. Start by trying to break it or by figuring out how other people might break it. The same is…Continue

Tags: agile, scrum, security

Started by nicolewells Mar 23.



© 2018   Created by Safety Community.   Powered by

Badges  |  Report an Issue  |  Terms of Service