RBI Gives Six Months Time To Payment System Operators To Store Data Within India

In a directive putting foreign players in the payment services on a leash, the Reserve Bank of India (RBI) has asked operators of all payment systems to store data within the country. This, the RBI said, will ensure safety and security of the information on users. The apex bank has given six months’ time for these operators to comply with its directive.

Financial daily Economic Times said the directive comes in the wake of the payment ecosystem expanding considerably in the country with the emergence of new payment systems, players, and platforms.

Global companies have begun setting up payment operations in India. In September 2017, Google launched a payment service, Tez, while WhatsApp began its services in February. Tez has claimed a 67 per cent market share for its services. WhatsApp services have led to controversy, with its competitors alleging that it has violated the National Payment Corporation of India norms.

In a statement, the RBI said: “Ensuring the safety and security of payment systems data by adoption of the best global standards and their continuous monitoring and surveillance is essential to reduce the risks from data breaches while maintaining a healthy pace of growth in digital payments.”

Currently, according to the RBI, some payment system operators and their partners to whom their operations are outsourced, store data either partly or completely. But the apex bank said it needs “unfettered access” to all payment data for supervision. Therefore, it said all payment system operators have to store data collected by them within the country.

The apex bank’s latest directive will now force these players to look at setting up facilities locally.