Google Pay is not a payment system operator but only a Third-Party App Provider: RBI tells Delhi HC
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Google Pay is not a payment system operator but only a Third-Party App Provider: RBI tells Delhi HC

The statement forms part of RBI's affidavit filed in a PIL seeking a direction to RBI to immediately stop the “unauthorized operation” of Google Pay in India.

Aditi Singh

Google Pay is not a payment system operator but only a Third-Party App Provider, Reserve Bank of India has stated before the Delhi High Court. (Abhijit Mishra vs RBI & Ors)

The statement forms part of RBI's affidavit filed in a PIL seeking a direction to the Reserve Bank of India to immediately stop the “unauthorized operation” of Google Pay in India.

Petitioner Abhijit Mishra had claimed that the operation of Google Pay as a ‘Payment and Settlement System’ could not be allowed since it is an unauthorized entity in terms of section 4(1) of the Payment and Settlement Systems Act, 2007 (PSS Act).

It was stated that Google Pay did not feature in RBI's list of authorized ‘Payment System Operators’ in India and was also in violation of several provisions under the PSS Act.

Petitioner had also asserted that Google Pay was completely in defiance of Section 15 (4) of the Ombudsman Scheme for Digital Transactions, 2019 as it had not appointed any Nodal officer.

Notice in the petition was issued in April last year.

Responding to the petition, RBI has stated that PIL is frivolous, misconceived and devoid of merits.

Informing that Google Pay was not a payment system operator, RBI has clarified that PSS Act and the offences under it woud not be applicable to it.

The Court was informed that Google Pay was a Third-Party App Provider with four sponsor banks and thus did not require any mandatory registration under PSS Act.

RBI added that consequently Google Pay was not covered under the ambit of Ombudsman Scheme for Digital Transactions, 2019.

However, the four banks were covered by the Banking Ombudman Scheme 2006, it said.

Contrary to the Petitioner's assertion, RBI further stated that as per National Payments Corporation of India's communication, Google Pay was fully compliant with the requirement of RBI circular on storage of data related to the payment system in India itself.

In view of the above, RBI has urged the Court to dismiss the petition.

The matter would be heard next on July 22.

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