LI Network
Published on: 21 August 2023 at 12:20 IST
The Delhi High Court has turned down two public interest litigations that were aimed at staying the operations of Google Pay in India, alleging breaches of regulatory and privacy standards within the nation.
The petitioner, Abhijit Mishra, contended that Google Pay was operating as an “unauthorized payment system provider” in India, lacking the required authorization.
However, the bench, led by Chief Justice Satish Chandra Sharma, dismissed these petitions. They declared that Google Pay functioned merely as a “third-party app provider” and hence, did not necessitate authorization from the Reserve Bank of India (RBI) in accordance with the Payments and Settlement Systems Act (PSS Act). The pleas were deemed to lack substance.
Mishra asserted that Google Pay was not included among the entities authorized by the PSS Act and other legal regulations for establishing and managing payment systems in India.
Furthermore, concerns arose regarding Google Pay’s access to personal information such as Aadhaar, PAN, and transaction details of its customers.
In its recent ruling, the court concluded that Google Pay did not qualify as a system provider as defined by the PSS Act and dismissed the petitioner’s claim that the platform was gathering sensitive user data.
The court also clarified that the National Payments Corporation of India (NPCI) was the operator of the UPI (Unified Payments Interface) system for Indian transactions and was the authorized “system provider” under the PSS Act.
Transactions carried out via Google Pay were categorized as peer-to-peer or peer-to-merchant transactions, not as a system provider under the PSS Act of 2007.
This clarification was made by the bench, which also included Justice Subramonium Prasad.
The court observed that third-party applications, like Google Pay, were designed to expand the customer base for participating banks. These applications obtained approval from NPCI to function on the UPI platform.