Balancing innovation and consumer protection: Regulating TSPs like GPay and PayTM
Published on: 16 July 2023, 12:16 pm
Know how designating the Reserve Bank of India as regulatory body can fulfil the primary aim of the Payment and Settlement Systems Act, 2007 and the Prevention of Money Laundering Act, 2002, which is to establish frameworks for the oversight and management of payment systems in India.
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Have you ever wondered about how PayTm differs from GooglePay (GPay)?
Is there even a difference— and if so, does it really matter? How do the two compare with an e-commerce entity using a third-party platform to facilitate payment?
While the difference might seem negligible to an average consumer, legally the three are quite uniquely defined, with varied compliance requirements. The devil is truly in the details.
This article seeks to examine the existing legal regime governing technology service providers.
These platforms, for example GPay, merely provide a technological service to facilitate Unified Payments Interface (UPI) transactions.
“Is there a difference between PayTM and GPay— and if so, does it really matter? How do the two compare with an e-commerce entity using a third-party platform to facilitate payment?
They do so by identifying different types of payment systems and evaluating the thin line of distinction in the application of financial legislations such as the Payment and Settlement Systems Act, 2007 (PSSA) and the Prevention of Money Laundering Act, 2002 (PMLA).
While the above-mentioned platforms may be termed as 'intermediaries' in digital payment transactions, judicial interpretation, regulatory orders, the stance of the Reserve Bank of India (RBI), and the Financial Intelligence Unit (FIU) all seem to differ on the categorisation and obligations of each of these platforms.