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Google Pay plans to hand users more control over financial data

Google Pay has upgraded its privacy policy and will soon give users the ability to exercise greater control over their financial data. The upgrade to Google Pay’s mobile application will allow users to turn off data sharing with the company and also enable them to delete transactions from being analysed by the platform.

Speaking to MediaNama, Ambarish Kenghe, Vice Present of Product, Google Pay said that by next week the company will upgraded its app which will educate all users on how Google Pay uses transaction data and given them the option to turn on or off sharing of their financial data. “Our approach has been that data is very important, especially with financial data which is more sensitive. We always err on the side of caution to ensure that there are adequate safeguards,” he said.

Google Pay is one of two dominant players in the Unified Payments Interface (UPI) space, processing over 853 million transactions worth over Rs 1.77 lakh crore in January this year. Its market share stood at 37%, whereas PhonePe which processed 968 million transactions had a 42% market share in UPI payments at the end of January 2021. According to Credit Suisse, Google Pay has 75 million individual users and 3 million merchants in India.

Google Pay is currently facing a legal challenge in the Delhi High Court, wherein the petitioner has alleged that the company has violated the Reserve Bank of India’s guidelines by storing ‘sensitive’ data of users, which only payment service provider (PSP) bank systems are allowed to do so. While the Delhi HC sent notices to the RBI and Google Pay last year, and the company filed affidavits refuting the petitioners’ claims, the matter has been delayed for several months. The next hearing is scheduled for March 15, 2021.

Upgraded data policy

Kenghe explained that once Google Pay rolls out the updated app next week:

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  • All users will be directed to a module, as soon as they open the app, which will explain the new privacy policy and features
  • Users will have the option to turn on or off data sharing with Google Pay for ‘personalisation’ services
  • By turning on ‘personalisation’ services within the app, users can get offers and rewards based on their activity
  • If they turn off ‘personalisation’ services within the app, Google will not prompt users tailored offers or rewards
  • Users can also delete their last 10 UPI or tokenised card transactions

Contrary to public perception, Google Pay does not share data with third-parties nor with other Google platforms like its Ad services, Khenghe said. “We want to introduce new sets of controls to manage your GPay activity. It is not just an option to turn on or off data sharing, but we are giving users the ability to delete specific transactions towards personalisation purposes. This is to ensure that specific transactions are not used by Google Pay for providing value-add services,” he said.

In contactless card payments, Google Pay only gets a token, which is an encrypted code filled with details of the transaction. “We do not store the card number, but only store the token number. The user only shares the data within token, which includes device specific information for instance, with us,” Khenghe said.

“We want to make users aware of their choices and help them understand how their data is used. As they make a choice, we will respect it. If the user says do not take my data, we will work on improving the experience based on those constraints,” he said. The app upgrade and new privacy options will apply only to consumers on Google Pay and not merchants. Google India has published a blog on the proposed upgrade to its Google Pay platform.

Inferred data from transaction history

Regulatory guidelines mandate third-party players like Google Pay and its anchor banks to store all transaction data, whether for UPI or card transactions, for for up to 10 years. Kenghe said that while Google Pay has to store all transaction data, it does not analyse the users’ financial history to send offers or cashbacks.

“If you were making a transaction for recharge, we would get information about the type of transaction. But we do not use this data. From next week onward, if you turn off all data sharing with Google, the company will be entirely blind even to aggregate information. Only for customers who consent to share data, we may give some offers, but for users who do not want to give access we will be completely shut off,” he said.

No impact on lending service

Google Pay has teamed up with Axis Bank with a credit card and also has several banking partners, who provide personal loans to individuals. It also has partnerships with non-bank lenders to provide loans to its merchants, which it recently launched.

“We just enable the ability to apply the loan, we do not underwrite these loans. The strategy is to see how we can create more economic opportunities for our users, and credit is a critical part of that,” Khenghe said. He explained that the new privacy policy will not affect its lending strategy as they only act as a lead generator for lenders.

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While Google Pay’s users can block Google from accessing their transaction history on the app from next week, the lenders who underwrite loans will continue to get access to the users’ financial history through normal banking channels. As is practice, Khenghe said, Google passes all the data on to the lender and does not store any of the information.

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