Delhi HC rejects PILs seeking Google Pay ban over regulatory and privacy concerns

The Delhi High Court on Monday dismissed two public interest litigation (PIL) petitions that aimed to halt the operations of Google Pay in India. The petitions alleged that Google Pay was violating regulatory and privacy standards. A bench comprising Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad underscored that Google Pay functions as a third-party app provider and does not require authorization from the Reserve Bank of India (RBI) under the Payment and Settlement Systems Act (PSS Act). The court clarified that Google Pay does not fall under the category of a system provider as defined by the PSS Act. It emphasized that the National Payments Corporation of India (NPCI) is the designated operator of the UPI system for transactions within India. NPCI, as a system provider, is authorized by RBI to offer transaction facilitation services. Transactions conducted through Google Pay using the UPI system are exclusively peer-to-peer or peer-to-merchant transactions, and Google Pay does not qualify as a system provider under the PSS Act of 2007. Addressing concerns about data privacy, the bench dismissed the argument that Google Pay improperly accesses and collects sensitive user data. The court referred to the UPI Guidelines of 2019, which distinguish between “customer data” and “customer payments sensitive data.” The former can be stored by the app provider in encrypted form, while the latter must be stored solely within the bank systems of payment services providers, rather than third-party apps like Google Pay, as per Google Pay’s chosen multi-model API approach. The verdict stemmed from a plea by advocate Abhijit Mishra, who personally argued before the High Court that Google Pay’s operations in India as a payment system provider lacked the necessary permissions. Mishra contended that the storage of sensitive information about Indian citizens by Google Pay would constitute violations under the Aadhaar Act of 2016 and the PSS Act. Representing themselves, advocate Abhijit Mishra presented the case. Advocates Ramesh Babu MR, Manisha Singh, and Nisha Sharma represented RBI. Google Pay was represented by Senior Advocate Arun Kathpalia along with advocates Saurabh Kumar, Abhishek Kr Singh, Saurabh Kumar, and Diksha.