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Paytm for data localisation citing privacy, level playing field for startups

Paytm has allegedly written to the Internet & Mobile Association of India (IAMAI) in support of the proposed draft Data Protection Bill, 2018, reports the Economic Times. This was after IAMAI asked industry players for comments on the bill. Paytm also said that IAMAI’s views on the matter appeared to be ‘disconnected from the interests of Indian startups.’

MediaNama has reached out to Paytm and IAMAI for a comment and we will update the story if and when we hear from them.

Paytm says that it is for data localisation

  • which will benefit Indian startups
  • ‘create a strong consumer data protection framework that respects the privacy concerns of citizens’,
  • provide a level playing field for the Indian startup ecosystem
  • all financial data of Indians must be considered as ‘Critical Personal Data’ and therefore stored and processed only in the country.

It is worth noting that the draft data protection bill requires all data fiduciaries to store ‘critical personal data’ within India only.

In April, the RBI directed that all payments system operators working in India store payment systems data in India only within 6 months (in effect from October 15). However, the bill does not define ‘critical data’ explicitly. Paytm said that 6 months was ‘practical’ enough for companies to adhere to the central bank’s guidelines

In May, the Payments Council of India (PCI), which has around 100 payments firms members, sought a meeting with the RBI to suggest “alternative solutions which can meet the RBI requirements of unfettered access”, according to a report.

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IAMAI: Data Privacy Bill an onerous burden for startups

IAMAI recently criticised the draft saying that startups in India would find it difficult to operate if the bill was implemented: it would be an “onerous burden” to comply with the new bill and companies would have to substantially increase their spending in the new data regime. The industry body described the proposed Data Protection Authority as “an additional and complex regulator” that will impact the ease of doing business for Indian tech startups, reports ET.

PhonePe’s support for local data storage

Last week, PhonePe alleged that international payment companies were trying to evade taxes by having data servers abroad (and not in India). It added that it is for this reason that these companies were reluctant to have local data servers in India. The Flipkart operated company argued that localisation of data was necessary to “national safety and security” and for “national wealth creation.”

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