Google Pay Is A Third Party App Which Operates Within the Regime Set Up By National Payments Corporation of India: Google Informs Delhi HC

The information was provided to the Division Bench of Chief Justice DN Patel and Justice Prateek Jalan in a plea seeking a ban on Google Pay for allegedly violating the law governing payments banks.

At the outset, Google submitted that the present petition is frivolous and can't be entertained as it wrongly presumes that Google Pay is a payments bank.

As it is clarified by the Reserve Bank of India in its counter affidavit, Google Pay is just a third party app and it is not registered as a Payments Bank so as to make it subject to the regulations of NPCI.

It is further submitted by Google that the only protocol which was required to be followed was to seek authorisation from the NPCI to operate as a third party app and the same was compiled with by Google Pay before starting its operations.

The counter affidavit further states that:

'Google Pay is also not the operator of a pre-paid payment instrument (PPI)/ wallet and is also not a PSP Bank regulated by RBI under the Banking Regulation Act, 1949, and accordingly the question of requiring an approval from the RBI does not arise since Google Pay does not perform any of these roles/ functions.'

Filed by Mr Abhijit Mishra, the petition seeks following reliefs from the court:

the Petitioner has sought the following directions from the court:

1. Direct the RBI and Centre to immediately take action against respondent No. 5 which is provisioning its services by way of "Google Pay" in India
2. Direct the RBI and Centre to immediately suspend operations of respondent No. 5 in UPI through its App "Google Pay" till it completely complies with interoperability;
3. Direct RBI and Centre to conduct a thorough third party and independent investigation of respondent No. 5's App Google Pay app to check compliance of every directive, guidelines issued by NPCI and RBI;
4. Direct respondent No. 5 to suspend its operations and/or not expand its user base till a thorough independent third party audit by CERT-IN or any other reputed third party app of the Google Pay App is conducted and certified by RBI and Centre
5. Direct RBI and Centre to initiate proper punitive action against the respondent No. 5 for its wilful and continued non-compliance of directions/ circular of RBI
6. Impose a hefty penalty amounting to at least 10 times revenue of Google Pay, since start of its operations in India to be contributed towards Covid-19 Relief Fund in India