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Business trends

Paytm alleges Google Pay breaching India privacy rules amid surge in digital payments

Google Pay says it shares information as per laws and after user consent

Paytm's meteoric rise has also drawn the attention of billionaire Warren Buffett, whose Berkshire Hathaway last month invested in the company.   © Reuters

MUMBAI (NewsRise) -- Paytm, India's largest digital payments firm backed by Alibaba Group Holding, complained to authorities that rival Google Pay is breaching privacy rules in the south Asian nation by sharing user data with its group companies.

In a letter to the National Payments Corporation of India, or NPCI, Paytm said the U.S. company is using the payments data of Indian users for its advertisement business and is sharing it with "group companies and unnamed third parties," under its payments policy for India. "This is a clear disregard for a consumer's need for privacy," Paytm said in its letter dated Sep. 13.

Paytm's allegations fly in the face of a surge in digital transactions that is set to grow into a $500 billion industry in India over the next two years. The digital boom comes at a time when high-speed internet is fast catching up amid a proliferation of smartphones and ultra-low data charges. The growing demand also lured top technology companies such as Amazon.com and Apple into the fray.

Paytm's meteoric rise has also drawn the attention of billionaire Warren Buffett, whose Berkshire Hathaway last month invested in the company. Buffett's investment marked his group's first funding for an Indian start-up, underscoring the financial payments sector's rising potential.

In the past too, Paytm raised concerns about the policies of its rivals that have stepped up rolling out instant money transfer products. In February, it accused Facebook-owned messaging app WhatsApp, which has more than 200 million monthly active users in India, of abusing its "dominance" in India "to gain undue advantage" of a state-backed open payments platform called Unified Payments Interface in its new payments app.

Paytm has also sought NPCI to revisit the payments policy of Google Pay in India. A spokesman for NPCI wasn't immediately available to comment.

Google, however, denied the allegation saying the company does not use individual transactions data to make money, including for advertisements.

"Google Pay shares user data as may be required for the purpose of processing transactions or providing Google Pay Services with our authorized partners," the company said in a statement. These include participating banks, bill aggregators, merchants on the "Google Pay for Business" program, and with whom the users are transacting, the company said.

"Sharing of this information is in accordance with the applicable laws and requisite consent obtained from the user and in conformity with standard industry practice," it added.

Indian government's UPI is a real-time payments platform developed by NPCI to drive digital transactions in the country.

Google launched its payments app in India last year, naming it Tez. However, in August, it rebranded the app as Google Pay, partnering with several banks to woo more users.

--Dhanya Ann Thoppil

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