The Ministry of Finance in India is proposing that the government relax a directive that would require global payment firms to store the data of customers only locally.
According to a report in Reuters, the move comes amid weeks of lobbying on the part of companies in the U.S., as well as from trade bodies. Easing of the proposal would give relief to Mastercard, Visa and American Express, which were worried that the data rule would cost them millions of dollars and lay the groundwork for other governments to set similar rules. The news comes as countries around the globe are placing greater scrutiny on companies in how they handle customer data.
Reuters noted that in April, foreign payment companies were surprised by the Reserve Bank of India’s directive calling for all payment data to be stored in India within a six-month time frame. After meeting in June with executives from the payment companies, the solution that is being mulled is allowing the data to be stored outside of India as long as there is a copy residing in the country.
At the June meeting, RBI Executive Director S. Ganesh Kumar said the central bank had been approached about the companies’ worries, and was in the process of putting together something to clarify the rules.
“This is a big step and shows India has a progressive outlook toward businesses,” said an executive with one of the payment companies. “This will hopefully serve as a precedent for other regulators who might be thinking of data localization,” added a lawyer familiar with the matter.
As it stands, global payment companies store and process transactions for Indian consumers outside of India. The move to protect the data comes as more Indians are embracing plastic in lieu of cash as the country tries to transfer to a digital payment society.