Storage of Payment System Data And Mastercard Issue
Source : BUSINESS TODAY
Economy
What is discussed under Storage of Payment System Data And Mastercard Issue ?
- About the Issue
- What is Storage of Payment System Data ?
Why in News ?
Reserve Bank of India (RBI) barred Mastercard Asia/ Pacific Pte. Ltd. (Mastercard) from on boarding new domestic customers debit, credit or prepaid over violation of central bank’s directions on storage of payment system data.
Key Facts
- The prohibition will be effective July 22.
Image by Bruno /Germany from Pixabay - RBI had directed all system providers to ensure that within a period of six months the entire data and full end-to-end transaction details, information collected carried or processed as part of the message relating to payment systems operated by them was stored in a system only in India was notified in 2018.
- All system providers were also required to report compliance to RBI and submit a board-approved system audit report conducted by a CERT-In empanelled auditor within the specified timelines.
- RBI has the power to release such notification under the Act Section 17 of PSS Act.
- As a result of Mastercard Asia/ Pacific Pte. Ltd. (Mastercard) do not comply with the directions on Storage of Payment System Data are to ceased operation in India.
- The existing costumers will not be affected.
What is Storage of Payment System Data ?
- Reserve Bank of India issued a directive vide circular on April 2018 on Storage of Payment System Data advising all system providers to ensure that, within a period of six months, the entire data relating to payment systems operated by them is stored in a system only in India.
- The entire payment data shall be stored in systems located only in India, except in cases clarified.
- Directions are applicable to all Payment System providers authorised / approved by the Reserve Bank of India (RBI) to set up and operate a payment system in India under the Payment and Settlement Systems Act, 2007.
- For cross border transaction data consisting of a foreign component and a domestic component, a copy of the domestic component may also be stored abroad, if required.
- There is no bar on processing of payment transactions outside India if so desired by the PSO (Payment Systems Operators).
- However, the data shall be stored only in India after the processing.
- The complete end-to-end transaction details should be part of the data.
- The data may be shared with the overseas regulator if so required depending upon the nature / origin of transaction with due approval of RBI.
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