Google Pay: Google to HC: GPay doesn’t require RBI authorisation as it’s not a payment system operator

Google, in an affidavit, has said the PSO authorized by the Reserve Bank of India (RBI) is the National Payment Corporation of India (NPCI) which is the owner and operator of the entire unified payment interface (UPI) network.
NPCI, in turn, authorizes the payment service provider banks and third-party application providers (TPAPs) like Google Pay to conduct transactions on its network, the affidavit said.
The affidavit was filed in response to a PIL which has alleged that Google”s mobile payment app, Google Pay or GPay in short, was facilitating financial transactions without the requisite authorization from RBI.
On Wednesday, a bench of Chief Justice D N Patel and Justice Prateek Jalan listed the matter for further hearing on August 31 after the petitioner sought time to respond to Google”s affidavit.
Petitioner Abhijit Mishra, a financial economist, has claimed that GPay was acting as a payments system provider in violation of the Payments and Settlements Act as it has no valid authorization from the central bank of the country to carry out such functions.
Mishra has also contended that GPay does not figure in NPCI”s list of authorized ”payment systems operators” released on March 20, 2019.
Google has contended, in its reply filed through advocate Himanshu Vij, that it works within the NPCI regime and complies with its guidelines and the applicable laws.
It also said that it will take steps to comply with the RBI”s March 17, 2020 ”Guidelines on Regulation of Payment Aggregators and Payment Gateways” which mandates that entities providing merchant services, like Google Pay, get registered with the central bank.
Google has also said that it is complying with RBI”s 2018 ” data circular” which mandates that all system providers have to ensure that entire data relating to payment systems operated by them are stored only in India.
Google said it is complying with the circular, even though it is only applicable to system providers and not service providers like itself.
RBI had earlier told the court that Google Pay is a third-party app 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, RBI had said.
RBI had also told the high court that since Google Pay does not operate any payment system, it does not find a place in the list of authorized payment system operators.