Though Reserve Bank of India’s (RBI) deadline for payment companies to comply with its data localisation norms came to an end on Monday (15 October), well-known international brands like Visa, Mastercard and American Express are still holding out, Hindu Business Line has reported.
To protect the sovereignty of financial data belonging to Indian consumers, RBI issued guidelines to payment companies in April, asking them to set up infrastructure to store data within the physical confines of the country. It had given them six months to comply with the same.
A majority of the companies, both Indian (PhonePe) & foreign-based ( Google Pay, WhatsApp), have complied. However, some 15 companies are in breach of the deadline. RBI has indicated that though it will not impose penalties on errant firms, it has asked them to submit a time-bound schedule for compliance.
Data localisation is important as it allows RBI to analyse data on financial transactions emerging out of India and use it for analysis and fraud prevention. Data which is stored in servers based out of India is beyond the reach of RBI as Indian laws do not apply to it.
Companies like Visa & Mastercard that haven’t yet complied with RBI norms, dominate the Indian payments ecosystem. It is estimated that these card networks along with the American Express, handle more than 70 per cent of the digital transactions in the country.
In order to break the duopoly of Visa & MasterCard in India and reduce transaction costs, Rupay card scheme was launched in 2016 by the National Payments Corporation of India (NPCI).
As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.
Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.
We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.
Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.