With six months given to comply with the Reserve Bank of India’s (RBI) guidelines to bring and store India’s financial data onshore, global financial technology giants such as Visa, Google and Facebook are trying to meet officers of the central bank, the finance ministry and the information technology ministry to modify the order, sources said.
Facebook’s chat messaging app, WhatsApp, is testing the software for a mobile wallet, WhatsApp Pay. Google recently launched Tez, a similar app. Visa is a global payments technology company that connects consumers, businesses, financial institutions, and governments.
“Ideally we would request for permission to be allowed ‘data travel’ and that is what we would be discussing with RBI officials. However, if the government makes it clear that financial data in no circumstances would be allowed to travel offshore, then we want the deadline to be extended. It will take us at least a year to set up bigger data centres that could accumulate terabytes of financial data,” said a senior executive of a top company in the segment.
Visa, Facebook, Google have all refused to comment of the issue. Many of India’s fintech entities and banks have stored all their customer data in India; however, many do use foreign servers, for operations, providing services and for data analytics. If RBI completely stops ‘data travel’ for all purposes to destinations out of the country, these companies might not be able to continue many services they presently offer.
“I do not think the issue is that fintech players do not store data in India of their customers. The issue is when peak loads come, transactions happen and certain services are being done on that data, they may be done out of India. Some part of the service or data for analytics purposes is always travelling,” said Naveen Surya, chairman, Payments Council of India.
According to sector insiders, global payments technology players such as Visa, e-commerce giant Amazon India and tech majors such as Google have data centres in India. However, they do transfer data from India to other foreign data centres for various purposes.
Even so, some experts believe financial data should be stored in India for all purposes; logistically, it is not difficult. “We must come up with stringent data privacy laws, which will help curb the potential misuse of any such critical data. When data is stored in multiple geographies, there’s always lack of clarity as to which country’s data laws will be applicable in situations of conflict. We firmly believe every financial service provider in India must store data locally and there’s only a minuscule cost associated in complying with this,” said Kiran Vasireddy, operations head at Paytm.