The government and Reserve Bank of India are not considering to extend the deadline for local data storage (Data Localisation) by foreign payment companies. For the unaware, payments services firms are given a deadline of October 15 to set up the data locally, in order to avoid any issues in the future. The government would not relent under pressure from the global payment firms and the RBI is unlikely to extend the October 15 deadline for data localisation, an official said to Press Trust of India. “We are not in favour of extension. Also, data mirroring in not an option,” the official added.
What is Data Localisation?
Data localisation is an act of storing data on any device that is physically present within the borders of a particular country where the data was generated. Two top American Senators John Cornyn and Mark Warner have asked Indian Prime Minister Narendra Modi to adopt a soft stance on data localisation, warning that India’s policy on the issue will adversely affect American businesses in the country.
“Data localisation requirements, such as those contained in the draft data protection bill and draft national e-commerce policy framework, will have negative impacts on the ability of companies to do business in India, may undermine your own economic goals and will likely not improve the security of Indian citizens’ data,” they said.
RBI Already Gave Six Months to Payment Firms
The Reserve Bank, in April, gave six months time to global payment companies to store transaction data of Indian customers within India. The deadline ends Monday. Global financial technology companies have reportedly sought an extension to the October 15 timeline. Foreign payment companies had reportedly also asked the RBI to allow data mirroring which would mean they can store a copy of the data overseas as well.
The RBI in April had said that in order to ensure better monitoring of payment service operators it is important to have “unfettered supervisory access to data stored with these system providers as also with their service providers/ intermediaries/third party vendors and other entities in the payment ecosystem”.
“All system providers shall ensure that the entire data relating to payment systems operated by them are stored in a system only in India,” it had said.
The RBI has further said that data should include the full end-to-end transaction details, information collected/carried/ processed as part of the message/payment instruction.
WhatsApp Recently Confirmed the Set Up of Local System
Facebook-owned WhatsApp, very recently, confirmed that it has set up a local system to store the payments data within India. Other local firms such as Paytm, PhonePe already stores the data locally, but there’s no info from Google. The search giant Google is offering payment services via Google Pay in India, but the data is being stored outside India at the moment. A few months back, Google confirmed that it would set up system locally to fully comply with the terms of RBI.