PIL against Third-Party Payment Apps Paypal, Google Pay & others
The Bench comprising of Hon'ble Chief Justice D. N. Patel and Hon'ble Justice Prateek Jalan, Delhi High Court today heard a PIL to hold institution like the Reserve Bank of India and companies like Google Pay should be responsible for facilitating financial transactions without the essential authorisation from RBI.
The petition was filed by a former IT expert and avowed 'Financial Economist' Abhijit Mishra. Various PILs were filed which brought attention in the ongoing occasions. PILs that question the intent of different institutions, from the Reserve Bank of India, and the National Housing Bank, to bring digitised payment administrations and services, for example, Google Pay, PayPal, and payment made from banks like Paytm Payments Bank and so forth.
The Bench heard the petition after the rejoinder was filed by the petitioner.
Mr. Abhijit Mishra had sought a petition against RBI and Google, scrutinizing the illegality of the aforementioned case, in case of payments paid through a third party app providers sharing data of clients outside India.
According to Mr. Abhijit Mishra he contended that GPay is infringing upon the Payments and Settlement Act, by acting as a system provider because it has no substantial valid authorisation from the central bank of the country to carry out such functions.
He vehemently asserted that aside from amazon pay all other 37 entities including GPay does not reflect figure in NPCI's list of approved 'payment system operators' published on March 20, 2019. The Third-party app provider (TPAP) can admittance to UPI system and 4 banks have together partnered with google pay such as Axis Bank, HDFC Bank, ICICI, and State Bank of India and there is no authorisation to Google under Payment and Settlement Systems Act, 2007 i.e NPCI has wrongly understood the PSS act, 2007. This act is ultra vires in nature and a criminal application is additionally filed under Section 340 Criminal Procedure Code.
Mr. Mishra additionally contended that, the payment information can be shared with third-party is infringing upon Article 21 of the Indian Constitution, Section 6, 35 A of Banking and Regulation act.He also said that the data has been shared outside the country through these TPAPs while it should be kept in India. Upon which Hon'ble Justice Jalan said: "If RBI is okay and allowed the payment system, what is the Harm?"
The counsel for RBI has likewise told the court that since Google Pay does not operate any payment system, it has failed to find any place in the list of authorised payment system operators published by the National Payments Corporation of India (NPCI).
The Reserve Bank of India (RBI) has told the Delhi High Court that Google Pay is a third-party application provider (TPAP) and does not operate any payment systems.
Therefore, its operations are not in violation of the Payment and Settlement System Act of 2007.
Google Pay earlier contended that all transactions made through its platform are fully secured by redressal processes laid out in the guidelines issued by the Reserve Bank of India and the National Payments Corporation of India.
As per source a spokesperson from google said that: "Google Pay operates completely within the law. Google Pay works as a technology service provider to partner banks, to allow payments via UPI (Unified Payments Interface). UPI apps in the country are categorised as 'third party apps', and are not required to be 'payment systems operators."