Paytm picks a fight with Google, alleges internet giant shares data with third parties

Paytm has accused Google Pay of 'sharing' consumer data with the affiliate companies and third-party users of the tech conglomerate for monetary gains through advertisements. The homegrown company has even approached the National Payments Corporation of India to probe the matter. This is the second time Paytm is accusing another online payments platform of violating customer privacy. Before this, Paytm CEO and founder Vijay Shekhar Sharma had cried foul over WhatsApp Pay creating a "walled garden" and killing Unified Payments Interface, and had even threatened to approach the NPCI and higher authorities to address the "unfair leverage" granted to WhatsApp.

"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," reads the company's letter to the NCPI.

The company has brought into the notice of the NCPI that other foreign companies might also be sharing customer details among group companies.

The central government is in the process of formulating personal data protection bill, which mandates all payments companies to store data only in India.

Google in its response has said it does not use any individual UPI transactions data for any monetisation purpose, and that a common Google account is used for managing all Google products. "A common Google Account allows for checks and controls required for managing risk, fraud, spam, and for enhancing security measures that are applied across Google products... Google does not use any individual UPI transactions data for any monetisation purpose," a Google statement said.

With a greater internet penetration, better connectivity, and increasing social media use, the debate over data protection has caught up pace in India. This has also opened up the country as a lucrative market for foreign companies seeking to cash in on customer data. But security issues around data protection remain a concern.

In its April circular, the Reserve Bank of India had told the payments companies that to ensure better monitoring, it is important to have unfettered supervisory access to data stored with these system providers.

Local payments companies like Paytm, MobiKwik and PhonePe have already backed the RBI's decision. Recently, Flipkart-backed online payments platform PhonePe also accused foreign payments companies of making a hue and cry about the data localisation. It accused that these foreign companies are reluctant as they don't want to pay taxes.

(Edited by Manoj Sharma)