With digital payment services growing at a phenomenal pace in the country, it is critical that players invest in data localisation to ensure privacy and security of consumer data, SoftBank-backed Paytm said on Monday.
Recently, the Reserve Bank of India (RBI) had said all payment system operators in the country will be required to store data within India to ensure safety and security of users' information. The operators have been given six months' time to comply with the directive of the central bank.
"No one should be allowed to commercially launch service unless their systems are clearly only and only in India. Data Localisation is critical for the security of India's payment systems," Paytm COO Kiran Vasireddy said.
He (RPT) He added that every payment system, app and payments platform operating in India must be compliant of this regulation before offering services to customers.
"The payments network is interconnected and interoperable. Breach by any player who is not complying carries potential implications on all other players who have complied with the guidelines," he (RPT) he pointed out adding that the company is compliant with all the rules.
He (RPT) He added that it is therefore important that it is obligatory on part of all payment system operators and participants to ensure compliance with RBI's mandate at the earliest.
Vasireddy said when data is processed and stored in multiple geographies, there could be a lack of clarity as to which country's data laws will be applicable to it.
"With increasing adoption of digital payments and reliance on electronic banking ecosystem, India must have a data localisation mandate to avoid data pilferage. Processing of data should also be in India as processing necessarily maintains a local cache and that is a risk," he (RPT) he added.
Besides, financial data stored in the country will give unfettered access to the regulators to audit data for faster redressal, he (RPT) he added.
"It will further help boost customers' confidence in moving towards digital payments as they won't have to worry about their personal data being compromised," he (RPT) he said.
Paytm, in the past, has alleged that Facebook-owned WhatsApp's UPI payment platform has security risks for Indian consumers and is not in compliance with the guidelines.
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