How is Google’s GPay operating without authorisation, Delhi HC asks RBI

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  1. The Delhi High Court has asked the Reserve Bank of India (RBI) to explain how Google was operating its payment services in India without taking any approvals or licence from the RBI. Google’s GooglePay uses BHIM unified payments Interface (BHIM UPI) for money transfers.
  2. The court’s query has come in the backdrop a plea which had alleged that Google Pay was acting as a payments system provider in violation of the Payments and Settlements (PSS) Act, 2007. This was because it is not listed in the RBI list of authorised payment systems operators.
  3. Further, the plea has also raised concerns that GooglePay might have violated RBI’s April 2018 Master Circular on Storage of Payment System Data and pose significant threat to privacy of citizens.
  4. RBI in its circular had mandated all system providers shall ensure that the entire data relating to payment systems operated by them are stored in a system only in India.
  5. The PSS Act provides for the regulation and supervision of payment systems in India and designates the Reserve Bank of India as the authority for that purpose and all related matters. A payment system refers to a system that enables payment to be effected between a payer and a beneficiary, involving clearing, payment or settlement service or all of them.
  6. Both bank and non-bank players are payment service providers in PSPs in India. Only bank-led PSPs have direct access to payment systems. Non-bank PSPs can access payment systems only through a member bank.