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GPay can share UPI data under law, says Google:
Google India Digital Services Limited has told the Delhi High Court that its GPay app, being a TPAPs (Third Party Application Providers), is allowed under the law to share customer’s UPI (Unified Payments Interface) transaction data with third parties.
But, what’s the issue?
A petition was filed against Google India’s payments app, Google Pay, at the Delhi High Court as it flouted the rules of Unified Payments Interface (UPI) interoperability.
- According to the petition, Google Pay does not allow new users to use their existing Virtual Payment Address (VPAs) or UPI ID on its platform, which the consumer might have created through other UPI platforms or apps.
- And this is against the National Payments Corporation of India (NPCI) Guidelines.
- As per NPCI guidelines on interoperability, UPI payment platforms need to give a choice to users to transact using their existing IDs.
Also, the petitioner had claimed that GPay was acting as a payments system provider in violation of the Payments and Settlements Act as it has no valid authorisation from the central bank of the country to carry out such functions.
What does interoperability mean?
Interoperability enables payment systems to be used in conjunction with other payment systems. It allows prepaid payment instruments (PPIs) issuers, system providers and system participants from different systems to undertake, clear and settle transactions across systems without participating in multiple systems.
What has the RBI said?
Reserve Bank of India (RBI) has told the Delhi High Court that Google Pay is a third party app provider (TPAP) and does not operate any payment systems.
- Therefore, its operations are not in violation of the Payment and Settlement System Act of 2007.
The Payment and Settlement Systems (PSS) Act, 2007:
It provides for the regulation and supervision of payment systems in India and designates the Reserve Bank of India (Reserve Bank) as the authority for that purpose and all related matters.
The Reserve Bank is authorized under the Act to constitute a Committee of its Central Board known as the Board for Regulation and Supervision of Payment and Settlement Systems (BPSS), to exercise its powers and perform its functions and discharge its duties under this statute.
- What is UPI?
- About NPCI.
- Key provisions in the Payment and Settlement Systems (PSS) Act, 2007.
- Who has the power to set up BPSS?
Sources: the Hindu.