Citing that online payment firms have entered into an interoperable domain, Paytm is advocating for stringent laws to store data within the boundaries of the country. According to Kiran Vasireddy, COO of Paytm, breach by other players have the potential to malign the entire ecosystem.
“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. Therefore, it is obligatory on part of all payment system operators and participants to ensure compliance to this mandate at the earliest,” said Vasireddy.
Varireddy’s comment comes in the wake of Reserve Bank of India asking all payment system operators to ensure that data is stored only within the country. RBI has also given the companies a deadline of October 15, 2018.
According to Paytm, India has enough technology and manpower resources to support this migration.
“India is well equipped with the requisite people and technology resources to support this migration within the proposed six months’ time-period. The cost of compliance is minuscule. Adhering to these guidelines will not have any impact on the quality of services as well,” he added.
According to Vasireddy, when data is processed and stored in multiple geographies there’s a lack of clarity as to which country’ data laws will be applicable to it. “Furthermore, the data is open to potential misuse as unregulated/third-parties might have access to our country’s sensitive financial data. Replicating the data back to servers in India or encrypting the same is not a trusted solution,” he said.
Asian countries such as China, Japan and Malaysia follow the same data storage rule.
This move by RBI came after it observed that not all system providers were storing the payments data in India.
In the last few years, digital payment has been on the rise in India. Transactions through UPI or Unified Payments Interface in February alone stood at 171.2 million accounting for Rs 19,126 crore in value of transactions.