Is Google Pay operating without licence: Delhi HC asks RBI

In a shocking revelation by the Delhi High Court, the authenticity of Google Pay has been challenged as the UPI-powered payment app is alleged to facilitate financial transactions without the requisite authorisation.

Delhi Court has asked Reserve Bank of India (RBI) and Google India Digital Services Private Limited to file a reply on the plea alleging Google Pay not being listed as an authorised operator as per list of the 'Payment System Operators'.

The list can be seen here where Google Pay is not amongst the 82 players that have received Certificates of Authorisation issued by RBI under the Payment and Settlement Systems Act, 2007 for Setting up and Operating Payment System in India.

RBI’s list of authorised ‘payment systems operators’ was released on March 20, 2019.

Looking into the matter, a division bench of Chief Justice Rajendra Menon and Justice Anup Jairam Bhambhani issued a notice to the RBI and Google on a PIL filed by Abhijit Mishra.

The PIL highlighted the fact that Google Pay has unmonitored and unauthorised access to the personal information such as Aadhar, PAN,  and transactions of the public by acting as a Payment and Settlement Systems.

The petitioner has sought direction to the RBI to stop Google Pay operation in the country and requested the court to impose penalties on the same for doing unauthorised transactions.

If the allegations will be proven then its a serious offense by the search giant who has been allowed by NPCI and RBI to operate on UPI payment railroad. Notably, WhatsApp and other global players have been running from pillar to post to get NPCI nod and to deal with data localisation norms where Google was easily allowed to operate in.

Meanwhile, Google Pay holds the pole position in terms of UPI transaction value and giving tough competition to old rivals like Paytm and PhonePe.

While Google Pay has not released any official statement on the same, we'll have to wait how RBI reacts on the matter.

Update: In response to the petition, Google India said that as Google Pay operates as a technology service provider to its partner banks, to allow for payments through UPI infrastructure, and is not part of payment processing or settlement. There is no requirement for licensing of these services under the prevailing statutory and regulatory provisions.

The court will hear the matter on 29th April.

The development was reported by BusinessLine via PTI.