In April 2018, India’s central bank directed payment companies to store data locally for free supervisory access; a move companies such as Visa, Mastercard and American Express fear would cost millions of dollars and hamper global fraud detection, according to Reuters.
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, the online publication continues.
Thus, payments data should be stored “only in India” within six months for “safety and security”, according to Reserve Bank of India (RBI). But US companies protested and in June 2018, India’s finance ministry recommended relaxing the directive, according to minutes of a government meeting seen by Reuters.
The RBI plans to issue a “clarificatory circular” to address concerns related to its rules, the minutes showed. RBI did not respond to a request for comment.
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