SC notice to Centre, Facebook, Google on protection of UPI transactions

The Supreme Court on Thursday issued notice to the RBI and Facebook, WhatsApp, Google, Amazon on a plea by CPI MP Binoy Viswam seeking protection of data of transactions made over UPIs.

A bench presided over by Chief Justice S A Bobde sought a response also from the Union government as the petitioner claimed instead of fulfilling their statutory obligations, the RBI and the National Payments Corporation of India (NPCI) compromised interests of Indian users by allowing non-compliant foreign entities to operate its payment services here.

Senior advocate Mukul Rohatgi, representing Facebook, submitted that there are already two petitions pending before the top court in connection with WhatsApp's payment service.

Senior advocate Kapil Sibal, representing WhatsApp, said that WhatsApp had previously submitted that payment services will not be rolled out before complying with the requirements.

"There is apprehension that the regime of payments will commence before the regulatory framework is put in place," the bench said, adding concerns raised in this petition were different.

Senior advocate Shyam Divan, representing Viswam, submitted before the bench that the RBI in April 2018 had issued an order asking these foreign entities to ensure data transacted on their platforms are secured in a server within India.

Divan added that this direction was supposed to be complied by October 2018, but it was not done.

"The RBI and the NPCI have permitted the three members of the Big Four tech giants, i.e., Amazon, Google and Facebook/WhatsApp (Beta Phase), to participate in the UPI ecosystem without much scrutiny and inspite of blatant violations of UPI guidelines and RBI regulations," said the plea.

Divan claimed WhatsApp stored data with its parent company Facebook, which had servers located outside India.

The plea sought direction from the top court to the RBI and the NPCI to ensure that WhatsApp is not permitted to launch full-scale operations of "WhatsApp Pay" in India, without fulfilling all legal compliances to the satisfaction of the court regarding the requisite regulatory compliances.

Viswam claimed WhatsApp had a grey history of compromised data and security breaches, making it as not a viable option for running payment services.