Paytm vigorous fight against offshore digital payment enabler including Visa, Mastercard, Google and Facebook over local data storage seems to be tilting in favour of its rivals. The consortium of the US-based companies reportedly have managed to convince government stakeholders for relaxing rules over data storage.
Three months ago, the apex banking body – Reserve Bank of India (RBI) had directed payment companies to store financial transaction data inside the country within six months.
According to a Reuters report, Paytm’s strong lobby for making foreign payments companies to set up local data centers has wilted.
US-based payment firms have been expressing concerns including huge investments required for having data storage capability locally and short deadline (six months) to meet the compliance.
Members of Payments Council of India (PCI) that includes local and global payments companies like Visa, MasterCard and Facebook wanted to suggest RBI that most of its members have concerns with the proposal. But Paytm vigorousuly contested it on the grounds of national interest.
However, in one of the meetings that was chaired by Economic Affairs Secretary S.C. Garg last month, Paytm’s reference of having local servers of the aforementioned companies in national interest was reportedly cornered.
Anticipating a fierce competition from Google Tez and yet to be mass-launched WhatsApp Pay, Paytm has been lobbying hard for making them compliant with RBI diktat (set up local servers by October this year). The compliance would take time and require global companies to reshuffle current strategies.
Paytm and Vijay Shekhar Sharma have been lambasting Facebook and other non-Indian digital payments firms for not having local data storage facility. Sharma even termed the social networking giant as most evilest company on the earth.
Earlier, on the similar line, department of telecom had reportedly wanted server locations of global e-commerce companies to be in India only, however, the ministry of electronics and information technology did not support the restriction at that time.
While Paytm positioning against global rivals over data storage may look weak at the moment, sooner than the later, payment companies have to comply with local rules. Nevertheless, the ball is in government and PCI courts. Hence, in future, it would be interesting to see whether they support RBI stance on local data storage or not.
