India’s largest homegrown digital payments firm is using a rather unusual trick to take on the competition.
Noida-based Paytm has been playing watchdog against its global peers, cautioning regulators about one issue or another.
Recently, it wrote to the National Payments Corporation of India (NPCI) against Google’s privacy policy.
NPCI is the umbrella organisation that is responsible for a majority of retail payments, including the Unified Payments Interface (UPI), the system it has developed to facilitate inter-bank settlements. And Google Pay, or G Pay, is based on UPI. So Paytm’s letter to NPCI dated Sept. 13 said:
We would like to highlight a very important fact that Google Pay, which is an unregulated payments platform, has the scope of using their customers’ data for their monetary gains with complete disregard of the user’s need for privacy. The critical payments data collected by them is being processed and stored outside of India, which can have severe security implications in case of a data breach as their policy states that this data is also being disclosed with advertisers and third-parties.
Since then, Google has tweaked its privacy policy. The firm dropped the word “disclose” from its privacy clause.
Currently, India is in the process of finalising its data policy. The government’s draft regulations issued in July 2018 recommended that personal data originated in India should be stored within the country.
Paytm, backed by China’s Alibaba, already stores its data in India. Therefore, if the draft norms are finalised, the homegrown firm will enjoy a huge advantage. Emails sent to Paytm and Google in connection with this remained unanswered.
In August 2018, over 91.99 million users transacted on Paytm in the online and offline domains, according to a company blog post. Meanwhile, G Pay, launched in September 2017, has already recorded 22 million transactions, the company announced last month.
Earlier, Paytm was engaged in a bitter battle with global companies over on-shore data storage.
The war is on
In February this year, Paytm founder and CEO Vijay Shekhar Sharma accused Facebook-owned instant messaging platform, WhatsApp, of restricting transactions to its own users instead of all UPI users. WhatsApp began beta testing its payments application with a million users in India in June this year and a launch is expected soon.
Paytm’s complaints against rivals didn’t stop at this.
Sharma also called Facebook, WhatsApp’s parent firm, “the most evil company in the world,” in an interview to Business Standard newspaper. “Facebook is openly colonising our payment system and is customising UPI to their benefit,” Sharma told The Economic Times newspaper in February.
Paytm’s anxiety hardly comes as a surprise amidst stiffening competition as India’s e-payments pie is estimated to grow over five times to $1 trillion by 2023, according to Credit Suisse. The ecosystem is already crowded: 100 players, including over 60 non-banking players like Paytm, Amazon Pay, MobiKwik, and PayU.
“It is a part of the competitiveness that is playing out. It will come to pass. And if it escalates then there are arbitration bodies that can always step in,” said an analyst, requesting anonymity.
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