Paytm forces Google to change privacy policy in payments app

Paytm digital payment IndiaGoogle has made significant changes to the privacy policy of its Indian digital payments mobile application, following official complaints from rival Paytm.

Paytm told the National Payments Corporation of India (NPCI) that Google’s digital pay platform allowed disclosure of customer data for advertising and other purposes, Reuters reported.

The row has erupted amid heightened debate about user privacy and how technology firms treat data in India and abroad. India is developing a new data protection law which could force companies to change how they transfer or store customer data.

Paytm, backed by China’s Alibaba and Japan’s SoftBank, had informed the NPCI, in a letter dated September 13 that Google Pay’s privacy policy amounted to clear disregard for a consumer’s need for privacy.

Google Pay’s privacy policy had said it could collect, store, use and/or disclose personal data and any communications made through Google Pay.

A Reuters review of Google’s privacy policy that was updated on Thursday showed the company had dropped the word “disclose” from its privacy clause.

Google Pay’s privacy policy stated that UPI transaction data could be used for monetisation purposes only by the platform itself. But the company said it did not do so now.

Google told Reuters in a statement that the changes were made to make it easier for customers to understand their monetisation and data usage policy.

“These changes are done from time to time and are based on product features and development,” a Google spokesman said.

Paytm’s letter to NPCI indicates the increasingly fierce competition in India’s digital payments market, which is expected to grow five-fold to $1 trillion by 2023.

Other companies vying for a bigger share of the market include PayPal and Facebook’s WhatsApp.

Paytm gained traction in India after India Prime Minister Narendra Modi banned high-value notes in November 2016, boosting digital payments. It has 95 million active monthly users, compared to Google Pay’s 22 million.

Both apps offer payment services using NPCI’s Unified Payments Interface (UPI) system that allows instant money transfers and merchant payments.