US companies face off with Paytm
payment firms have successfully pushed India to consider diluting rules on data storage, but their lobbying campaign has sparked a bitter industry spat pitting them against local rival Paytm, according to people aware of the matter and documents seen by Reuters.
Reserve Bank of India (RBI) in April directed payment firms to store data locally for “unfettered supervisory access”—a move companies such as Visa, Mastercard and American Express fear would cost millions of dollars and hamper global fraud detection. But the rules give a competitive advantage to Paytm, backed by Japan’s Softbank Group and China’s Alibaba, which already stores all its data in India. The company has publicly supported the proposal and, behind closed doors, tried to thwart efforts of those opposing them.
In a meeting between officials and industry representatives in June, chaired by India’s economic affairs secretary S.C. Garg, Paytm argued with foreign company executives on the benefits of storing data locally and said the rules were in the national interest, three people with knowledge of the discussions said.
Garg told Paytm not to bring the national interest into a debate around data storage, the people said. Garg did not respond to a request for comment. Separately, in May, Paytm privately objected to lobby group Payments Council of India (PCI), which wanted to tell the central bank that “most” of its members had some concerns with the proposal, e-mails seen by Reuters showed.
NEWDELHI:US