The Reserve Bank of India on Friday told the Delhi High Court that Google Pay is a third-party app provider, and does not operate any payments systems, which is why it is not enlisted as a payment system operator with the National Payments Corporation of India, reported PTI.
Google Pay’s operations do not violate the Payments & Settlements Act, 2007, the RBI said, in response to a petition that argued that Google Pay does not have required authorisation from the RBI. The petition was filed by one Abhijit Mishra, via advocate Payal Bahl. The RBI was represented by senior advocate V Giri, per the Economic Times.
The bench consisting of Chief Justice D.N. Patel and Prateek Jalan has called for a detailed hearing on the matter, as it affects other third-party apps. The case will now be heard on July 22. MediaNama has not independently reviewed the court’s order.
WhatsApp says it is compliant with RBI localisation norms
In a submission to the Supreme Court on June 17, WhatsApp said it is now compliant with the data localisation requirement in the RBI’s April 2018 Circular and the follow-up FAQs released months later in June 2019. Filed by Brian Hennessey, associate general counsel at WhatsApp, the submission said that it has “expended significant engineering time and effort over the last 7 months”, and localised all five payments data elements identified in the RBI’s affidavit. “An independent third-party auditor, certified by CERT-In, has confirmed that WhatsApp’s payments feature satisfies the data localisation requirements under the RBI circular and FAQs,” the circular says. WhatsApp also asked the court to dispose the petition and the related interim applications.
WhatsApp’s submission was made in response to an affidavit filed by the RBI in November 2019, wherein the regulator had raised concerns about WhatsApp’s compliance, and had identified five payment data elements that were being stored outside India beyond the permitted timelines indicated in the RBI circular and FAQs. Apart from making a submission in the court, the RBI had asked the National Payments Corporation of India, which owns and operates the UPI platform, to not allow WhatsApp Pay’s full-scale launch in India until it complies with data localisation norms.
The submissions itself have been made in a petition filed by Delhi-based think tank Centre for Accountability and Systemic Change, which had challenged the operation of WhatsApp’s UPI payments service for being non-compliant with Indian laws, including RBI’s localisation norms, in July 2018.
Meanwhile, the National Payments Corporation of India and RBI have reportedly given their approvals for the launch of WhatsApp’s UPI payments service, which had been in pilot for over two years. Facebook and WhatsApp have run into hurdles around India’s data localisation mandate and the related regulatory clearances.