Current Affairs Brain Booster for UPSC & State PCS Examination (Topic: Google Pay Violation)

Current Affairs Brain Booster for UPSC & State PCS Examination

Topic: Google Pay Violation

Google Pay Violation

Why in News?

The Delhi High Court on August 24th, 2020, sought response of the Centre and the Reserve Bank of India (RBI) on a plea seeking action against ‘Google Pay' for allegedly violating the central bank's guidelines related to data localisation, storage and sharing norms.
A bench of Chief Justice DN Patel and Justice Prateek Jalan issued notices to the authorities and also Google India Digital Service Pvt. Ltd. on the petition and listed the matter for further hearing on Sept. 24.

About the Petition

The petition sought direction to Google India Digital Service to give an undertaking to not store data on its app under UPI ecosystem and further not to share it with any third party, including its holding or parent company.
The plea further sought to direct the RBI to take action and impose penalty on the company for its alleged serious violations of applicable laws.
'Google Pay' is regulated by National Payment Corporation of India which is responsible for granting permission to Payment Service Provider (PSP) as Banks and to Third-Party Apps (TPAs) to operate under the UPI network.
The plea sought a direction to the RBI to take appropriate punitive action against the NPCI and revoke its authorisation to operate and regulate the UPI payment system, on account of risking customer payments data its failure to audit Google India Digital Service Pvt Ltd and take any steps against it despite its acts of flagrant and serious noncompliance of applicable laws.
It also alleged that Google Pay is further violating the UPI procedural guidelines by sharing personal sensitive user data in complete breach of binding regulatory guidelines.
The plea also claimed that Google Digital Service Pvt Ltd, vide its product 'Google Pay', seeks to access the location of the users in the name of security and uses the same to gain revenue from offering highly targeted or personalized advertising opportunities to advertisers.
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. Google Pay claims not to be under RBI regulation and only under NPCI.

Data Localisation Guidelines

In a circular issued on April 06, 2018, the central bank had advised all system providers to ensure that within a period of six months, the entire data relating to payment systems operated by them is stored in a system only in India.
As per the latest clarifications, while there is no bar on the processing of payment transactions outside India, the Payment System Operators (PSOs) will have to ensure the data is stored only in India after the processing.
In case the processing is done abroad, the data should be deleted from the systems abroad and brought back to India not later than the one business day or 24 hours from payment processing, whichever is earlier. The same should be stored only in India. The data stored in India can be accessed for handling customer disputes, whenever required.

About Google Pay

Google India launched, 'Tez', a mobile payments service targeted at users in India which later folded into the new 'Google Pay' app.
'Google pay' is a third party app which facilitates payment in the UPI ecosystem and is able to do the same by partnering with various PSP/acquirer bank.