Payment companies will need to comply with the government's new Information Technology Rules 2021, as they fit the definition of an internet intermediary, legal experts told MediaNama. However, compared to social media entities, streaming platforms and digital media entities, the burden of compliance is far lower since payment players are already regulated entities under the Reserve Bank of India. A bit of context: According to the IT Act, 2000 an intermediary is "any person who on behalf of another person receives, stores or transmits that record or provides any service with respect to that record." It includes internet service providers, search engines, online payment sites and auction sites among others. Therefore, payment companies like Google Pay, Paytm, PhonePe and other pre-paid instrument or e-wallet players on the Unified Payments Interface, or Razorpay, PayU and CCAvenue, who provide payment gateway and aggregator services, qualify as internet intermediaries. Why it matters: Since payment companies fit the definition of an internet intermediary, they will need to comply with the IT Rules 2021. This includes: appointing a grievance officer and a compliance officer who respond to queries sent by the government and regulators, they need to conduct due-dilligence, proactively identify and take down content using automated tools, comply with government takedown orders and create a grievance redressal mechanism. Need to test scope of law According to a senior lawyer, since payment companies connect users and transmit data they fit the the definition of intermediary under the IT rules. "But these were created without a…
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