The Delhi High Court recently gave popular UPI payments platform — Google Pay the green light, dismissing two petitions that called for a halt to its operations in India over alleged regulatory and privacy breaches.
What Happened? Diving into the details, the bench, led by Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad, clarified that Google Pay operates as a third-party app provider. This means it doesn’t need a direct nod from the Reserve Bank of India (RBI) under the Payment and Settlement Systems Act (PSS Act). Essentially, Google Pay isn’t the main player in the transaction game but rather a facilitator.
The Court further emphasized that the real operator behind the UPI transaction system in India is the National Payments Corporation of India (NPCI). Transactions made through Google Pay are just between two parties, either individuals or a person to a business.
Data privacy concerns: Addressing data privacy concerns, the Court highlighted clear storage guidelines. While the app provider can store some data in an encrypted form, the payment service provider’s bank systems strictly hold the more sensitive payment data under the multi-model API approach that Google Pay has opted for.
This ruling came in response to advocate Abhijit Mishra’s claim that Google Pay’s operations in India lacked the necessary permissions, potentially violating the Aadhaar Act, 2016 and the PSS Act. Both Google Pay and the RBI had their legal teams present during the hearing.
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