SoftBank-backed Paytm has filed a complaint against Google Pay with the National Payments Corporation of India (NPCI) alleging that it is sharing payments data of its customers with group companies and third-party service providers.
"As per their policy, the company has stated that it is using payments data of Indian users for their advertisements business and is sharing it with group companies and unnamed third parties also. This is a clear disregard for a consumer's need for privacy," says the letter written by Paytm to NPCI.
Google, however, has refuted the claims.
"Google does not use any individual UPI transactions data for any monetisation purpose e.g. for advertisements," a Google spokesperson told Moneycontrol in an email response.
The statement, however, said that Google Pay shares user data for processing transactions or providing Google Pay services with its authorised partners.
"These include participating banks, banks on UPI infrastructure, bill aggregators, merchants on the Google Pay for business programme and with whom the users are transacting and billers such as utility services. Sharing of this information is in accordance with the applicable laws and requisite consent obtained from the user and in conformity with standard industry practice," the spokesperson added.
The development comes close on the heels of WhatsApp getting embroiled in the payments data sharing controversy.
According to NPCI, no payments service provider is allowed to share data with any other third party unless "mandated by applicable law or required to be produced before a regulatory/statutory authority".
In April, even the Reserve Bank of India (RBI) released guidelines asking all payment system operators to ensure that data is stored only within the country.
The service providers have been mandated to comply with the order by October 15.Google's payments offering was launched as Google Tez in September last year. The company rebranded it as Google Pay in August.