UPI’s techno-legal framework will plug privacy issue

NPCI promoted payment gateway will be deployed within two months


Unified Payments Interface (UPI), the advanced version of Immediate Payment Service (IMPS) to provide seamless money transaction, will have a techno-legal approach for data protection.

According to a source familiar with the development, it is for the first time in the world that a techno-legal mechanism has been put in place to tackle privacy issue.In an interaction with Deccan Herald, iSpirit Co-founder Sharad Sharma said that UPI is expected to be the fourth layer of the India Stack, which is a set of application programming interfaces (APIs).

“These APIs enable developers to take advantage of Aadhaar for eKYC, digi lockers for storing documents, UPI for payments and digital signatures for obtaining customers’ consent. These services will help businesses go digital and scale up easily,” said Sharma.

National Payments Corporation of India (NPCI), which launched the UPI, will soon come up with the law so that it will be a foolproof platform for financial transaction in the country and can give competition to all the wallets.

NPCI is already running the project on a pilot basis with 10 banks coming up with the app. According to sources, the UPI will most likely be rolled out in full swing by roping in all the PSU banks within two months.

Data security and privacy have hogged the limelights globally with the Apple-FBI standoff. In India also, people have questioned the data security and privacy of Aadhaar, bank accounts, etc.

The iSpritit Co-founder said that Europe implemented data security system which is more from a legal stand-point. “In the US, the framework is having poor legal protection, but their technology for protection is advanced,” he said.

India is taking a techno-legal approach and encryption is part of this privacy game plan. “But here the biggest thing about privacy is that people’s data is used without their consent. India would like to put the user consent at the centre of all sharing of data via a digital consent,” said the source privy to the development.

The central government is making use of JAM (Jan Dhan Yojana, Aadhaar and Mobile Number) and Digital India initiatives to expand its citizen-centric service delivery backed by evergrowing smartphone penetration. According to IAMAI and KPMG report, India will have a staggering 500 million mobile users by 2017, including 314 million mobile internet users.