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.
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.
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.
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.
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
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