NPCI, Digital Payment Platforms Seek Exemption From DPDP Act Provisions

The National Payments Corporation of India (NPCI), along with digital payment platforms such as Google Pay, PhonePe and Amazon Pay have reportedly sought exemption from Digital Personal Data Protection (DPDP) Act provisions that require user consent for each transaction.

The companies in their submissions to the Ministry of Electronics and Information Technology (MeitY) said that the mandate will also be applicable on recurring payments and will lead to a rise in cost and complexity, according to an ET report, citing sources close to the matter.

The issue will be more pronounced in the case of smaller companies and startups, they said.

After much anticipation, MeitY released the draft rules for DPDP on January 3 and invited suggestions from the public till February 8. Later, the deadline was extended to March 5.

As per the DPDP draft rules, data fiduciaries will need to give necessary details and seek consent from users before processing their personal data.

Data fiduciaries are the entities which regulate how personal data is processed. With this, the users will have the power to revoke their consent and in case of any violation, they can file a complaint with the Data Protection Board of India.

The development comes at a time when the Unified Payments Interface (UPI) transactions jumped 5.8% to 19.47 Bn in July, touching a new all-time high. The transactions count grew by 35% in the reported month, on an annual basis.

As per NPCI data, the UPI transactions in July accounted for INR 25.08 Lakh Cr, a 4.3% increase from INR 24.04 Lakh Cr worth transactions recorded in the previous month.

Further, in the light of frequent massive UPI outages, the retail payments body recently rolled out an additional set of measures for payment service providers (PSPs) and acquiring banks to streamline UPI transactions, in May.

Also, the NPCI has been reportedly working on an internet of things (IoT) version of the UPI which will allow users to make digital payments via smart devices like smart appliances, wearables, connected cars, among others, earlier in July.

Meanwhile, digital payment companies have been engaged in introducing offerings such as personalised UPI IDs from Paytm and UPI Circle of PhonePe in the past few months, for users who prefer to maintain transactions private.

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