In what could become a regulatory problem for Gpay, the Delhi High Court has today questioned the Reserve Bank of India (RBI) about the legality Google’s payment app.
A division bench of Chief Justice Rajendra Menon and Justice AJ Bhambhani posed the question to RBI about how Gpay was facilitating financial transactions without the requisite authorisation from the central bank.
The petition was filed by Abhijit Mishra who has said that GPay does not figure in RBI’s list of authorised ‘payment systems operators’ released by the central bank on March 29, 2019.
The PIL said that GPay was acting as a payments system provider in violation of the Payments and Settlements Act, 2007.
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Responding to the High Court’s question, a Google spokesperson told Inc42 that “Google Pay operates as a technology service provider to its partner banks, to allow for payments through the UPI infrastructure, and is not part of payment processing or settlement. There is no requirement for licensing of these services under the prevailing statutory and regulatory provisions.”
A cursory glance through the National Payments Corporation of India (NPCI) showed that Google Pay is registered as a third-party app for UPI and is partnering with State Bank of India, ICICI Bank, Axis Bank and HDFC bank.
“The central bank is apprised of the progress and we remain committed to complying with the laws of the land,” Google spokesperson added.
Commenting on the data localisation hurdle that Google is crossing currently the Google spokesperson said that, “In order to support our partner banks, our efforts in complying with the government’s data localisation norms are underway, and given the scale and complexity, we are being mindful to prioritise data security and uninterrupted services to our users as we make this transition.”
The matter has been listed on April 29 for further hearing
Gpay, which was earlier called Google Tez was launched in September 2017 and the name was changed to Google Pay in August 2018. According to data from January 2019, Google Pay has clocked nearly 220 Mn transactions. Meanwhile, its monthly user base has grown from 14 Mn in March 2018 to 45 Mn last month (March 2019).