Money & Banking

How is Google’s GPay operating without authorisation: Delhi HC asks RBI

Our Bureau Mumbai | Updated on April 10, 2019 Published on April 10, 2019

File photo   -  Twitter/@GooglePayIndia

In a surprise move, the Delhi High Court on Wednesday asked the Reserve Bank of India to explain how Google was operating its payment services in the country without taking any approvals or licence from the regulator. This followed a public interest litigation (PIL), which alleged that Google Pay was acting as a payments system provider in violation of the Payments and Settlements Act.

The PIL alleged that Google’s name does not figure in the RBI list of authorised ‘payment systems operators’, released by the central bank on March 20.

“The Google India Digital Services Private Ltd doing business as Google Pay though its unauthorised operation in India as Payment and Settlement Systems has unmonitored and unauthorised access to the personal information such as Aadhaar, PAN, transaction etc. of the public by acting as a Payment and Settlement Systems,” read the plea.

Also read: Google Pay transactions hit $81 b in March

Google said it complies with all applicable legal requirements. “Google Pay operates as a technology service provider to its partner banks, to allow for payments through the UPI infrastructure, and is not a part of payment processing or settlement. There is no requirement for licensing of these services under the prevailing statutory and regulatory provisions,” the search giant said in a statement.

It added that it is taking steps to comply with the government’s data localisation norms. “Given the scale and complexity, we are being mindful to prioritise data security and uninterrupted services to our users as we make this transition. The central bank is apprised of the progress and we remain committed to complying with the laws of the land,” Google said.

Industry surprised

The court’s notice took the industry by surprise as Google offers payments service via the UPI platform for which it requires an approval from the National Payments Corporation of India (NPCI) and not the RBI. “Google Pay is not a wallet where a user can keep money like in Paytm wallet. Neither is it a payment bank where anyone can create a bank account. The PIL seems to be flawed,” said an industry observer.

However, another industry expert said the PIL could force the RBI to review the functioning of UPI based platforms. “The PIL could push the RBI to look at bringing parity between the regulations governing wallets and UPI-based payment services,” said the expert.

Published on April 10, 2019
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