Now, Govt wants foreign payment firms to store customer data
NEW DELHI: Foreign payment firms could keep copies of customer data in India while retaining offshore storage operations, the government said, as a way to resolve a row with Mastercard, Visa and American Express over the localisation of such information.
A decision by India’s central bank in April that all payments data should, within six months, be stored only in the country for “unfettered supervisory access” has led to furious lobbying by global firms that worry it would cost them millions of dollars.
India’s Economic Affairs Secretary S C Garg said that keeping data copies in the country had emerged as a possible solution during a meeting with officials from the Reserve Bank of India and executives from the payment firms.
“One of the options which emerged in that meeting was maybe mirror copies might be a potential solution,” Garg said.
He said the Reserve Bank of India had to take a final decision on the matter but keeping mirror images of the data in India would mean all the customer information would be available to local authorities.
The RBI’S directive comes as more people in India are switching to plastic, partly driven by Prime Minister Narendra Modi government’s decision to replace high-value currency notes in November 2016, since when the government has aggressively discouraged cash transactions.
In March, Indians clocked up transactions worth $52 billion using their 900 million credit and debit cards, nearly double the amount recorded in November 2016, data from the RBI showed.
But rising fraud is a concern too. The RBI in April said the payment ecosystem in India had expanded considerably, making it necessary to ensure the safety and security of data.
Garg said the government was trying to find a consensus over data localisation at a time of heightened scrutiny of how companies globally handle their customers’ data.
“What we do is we listen to different stakeholders, what they say, what their stance is and where can we can find a landing zone... That is the reason why it was suggested to have mirror copies,” he said.