GPay, PhonePe, PayTm: International players' 'banking activity' sans bank license?

By Thomas Franco*
Today Google Pay (G-Pay) owned by Google, PhonePe owned by Walmart, PayTm owned by Soft Bank and other payment apps have taken over money transfers. As per the report of the National Payment Corporation of India, in September 2021, there were 3.6 billion (3654.5 million) Unified Payments Interface (UPI) transactions worth Rs 6,54,531 crore.
This was made possible by National Payments Corporation of India (NPCI) which gives access to the accounts of all banks using the UPI platform as the accounts are linked with the customer’s Aadhaar card and phone number.
These linkages basically benefit the international players, as it allows them to do banking activities without a bank licence! GPay doesn’t charge anything for the transactions. Why? Because they are after the data more than anything else. At a later stage, they will start charging user charges from the remitter as well as the receiver. Apple Pay has already done that in the US.
There are more than 58 apps using the UPI platform. The banks have lost remittance business because of these apps. SBI, the largest bank, has only 1036.45 million remittances and its app has just 3.77 million transactions. Due to the service charges, customers don’t prefer the banks anymore. This is one way of killing banks to help Fintechs.
But this is just a tip of the iceberg. There is no way to get your money back if you remit to the wrong account using these apps. The transaction can’t be traced, whereas, in bank remittance, there is a way to trace and get your money back.

Moreover, in the apps, the owner of the app gets access to your data, thus invading your privacy. The companies use your financial behaviour to study what you buy, whom you pay and use it for advertising products and influence your purchase decisions.

Apart from the intrusion of one’s privacy, does it not create security issues? Let’s look at this aspect. Google has the map of the entire country, including the locations of defence installations. You must have seen in movies and TV serials, how the CIA and FBI get accurate locations through satellites and even plan operations using drones. It could be worse in real life.

Any individual can be easily put under surveillance using his Aadhar card, phone and GPS. People don’t realise this. The government knows this but doesn’t care. The NPCI is planning for some controls after 2021. Why haven’t they done it before allowing the apps to access data through UPI?
Google claims it’s planning to provide privacy data protection. The question is, to what extent? What is the RBI is doing? What S Gurumurthy of the Swadeshi Jagran March is doing at RBI about these videshi companies? Google is an investor in Reliance Jio. Reliance also has a payment bank which is hardly doing anything compared to Airtel payment bank and Paytm. Probably they are waiting.
The youth of the country are being taken for a ride. Fintech companies will use this data and give them loans at huge interest and lead them to a debt trap. Banks will keep losing business including loans as these apps will start lending soon. But, who cares?
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*Thomas Franco is the former General Secretary of All India Bank Officers’ Confederation (AIBOC). Source: Centre for Financial Accountability

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