Payments major visa said it has started storing the data of the local users in India that is signalling the partial complaince with the mandate of the Reserve Bank that has been syeadfast in the demand wherein all the payments companies global and the locals retain the transaction data of the Indian users on the local servers.
Visa has even submitted the status update to the RBI thereby including the plan on how it will tweak its existing global process8ng systems for fully complying the requirement of storing data within India. The same information was conveyed by the chief executive officer of the company during a call on October 24.
The companh didn’t disclose thd timelines fpr the shifts. “As of October 15, we are storing data locally, where we can also facilitate RBI’s requirement of access to Indian cardholder payment transaction data,” Visa CEO Alfred Francis Kelly told analysts.
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While the Visa has been retaining the data of the Indian users locally from the day of the RBI deadline it continues to process the data outside the country.
Visa and RBI did not respond to emails seeking clarity. India had over 1 billion debit and credit cards as of August 2018, according to RBI. Nearly 98% are debit cards issued by Visa, Master-Card and local player RuPay. Around 40 million credit cards are in circulation in the country.
The Analysts say that while India has maintained a perfect stand on data localisations there cpuld be challanges while handling the complexities of moving the located data in the overseas server to India.
“The direction from regulators and the government is clear and firm, but at the same time such transitions are fraught with complexity as country-specific data and systems would need to be untangled from their current overseas ecosystems,” said Vivek Belgavi, partner, PwC.
MasterCard and Visa are at the forefront of the opposition to RBI’ data localisation move and
aggressively lobbied through trade bodies such as the USIndia Business Council. They were joined by firms such as Google, Facebook and PayPal in requesting government intervention at multiple levels including during meetings with finance minister Arun Jaitley.
“We would see some pain the short term, but in medium to long term, local data processing options would flourish,” PwC’s Belgavi said. During the call with analysts, Visa’s Kelly spoke about his bullishness about the Indian market despite increased competition and regulatory challenges.
“If you look at India as one case study, that’s a market we’ve been in for 35 years. We’ve got a big team on the ground there. And we continue to be the market leader even though there’s lots of activity going on there in terms of both government intervention, as you talk about, as well as new players that are emerging,” he said.
The National Payments Corporation of India that is run by RuPay has emerged to be the second largest debit card issuer within India.
There is also the Unified Payments Interface (UPI) — the peer-to-peer mobile payments system that uses the country’s banking network for micro payments. Several companies such as Google, Truecaller, Paytm and PhonePe offer payments services using the UPI platform.
Kelly said “international payments volumes in constant dollars grew 11%. …acceleration in India and southern Europe was offset by slower growth in the United Kingdom and Australia,” he added.
