The government of India is reportedly considering allowing foreign card companies to store customers’ payment data copies.
In April this year, the Reserve Bank of India (RBI) said that all payments information must be stored in the country for ‘unfettered supervisory access’.
Global payment firms, including MasterCard, Visa and American Express have voiced some reservations. The companies had concerns of having to bear high costs for the data storage approach.
Discussions are currently ongoing between the RBI and executives from the payment firms. However, keeping data copies is being considered as a possible solution.
India economic affairs secretary, SC Garg was quoted by Reuters as saying: “One of the options which emerged in that meeting was maybe mirror copies might be a potential solution.”
Data copies aim to tackle fraud
Garg added that the central bank is yet to take a final decision on the matter. Furthermore, keeping copies of the data in the country would mean all customer information would be available to local authorities.
The move comes as more Indian consumers are switching over to electronic payment methods rather than cash. Furthermore, in November 2016, Prime Minister Narendra Modi decided to end the production of high-value currency notes.
Although unpopular in rural parts of India, in the cities, cashless efforts have rapidly increased.
The RBI’s directive to store data is intended to address security woes. Recently there has been a rise in the volume of card transactions. More security is critical as the number of fraud cases has increased.
Garg said the government was trying to find a consensus over data localisation as there have been growing concerns over how companies globally handle their customers’ data.
Nonetheless, Gang stated that India’s strong economic performance “warranted a sovereign rating upgrade by leading rating agencies.”
Statistics from the central bank revealed $52bn worth of payments in the country were made using 900 million credit and debit cards in March this year, which is around double the amount transacted in November 2016.