Biometric and data regulations block Apple Pay in India
Apple has scrapped plans to launch a platform on India’s Unified Payments Interface (UPI) platform, which would have enabled Apple Pay to conduct transactions with banks in the country, due in part to regulatory restrictions on biometric authentication, the Economic Times reports.
Guidelines for the National Payments Corporation of India (NPCI) make clear that it does not recognize biometric authentication outside of the framework of the Unique Identification Authority of India, according to ET. The UPI uses a four or six-digit number to authenticate transactions, and the NPCI would not allow fingerprint to be added as a method.
“NPCI has prescribed that transactions can be authenticated by biometrics only when they get validated by UIDAI,” said an ET source identified as a banker. “NPCI does not allow biometrics collected by devices as a mode of authentication.”
Sources told ET that the main problem for Apple is a new data localization rule instituted by the Reserve Bank of India. The company also had technical and design issues related to the UPI, and will wait for regulatory uncertainty to be resolved before moving forward with Apple Pay in India. Other companies that may be affected by the data localization rule include Mastercard, Visa, Amazon, WhatsApp, and PayPal.
Apple Senior Vice President for Internet Software and Services Eddy Cue told ET in October that the company wanted to launch Apple Pay in India.
A new Data Protection Act is making its way through India’s legislative process, and a decision is expected soon in a Supreme Court challenge of UIDAI’s Aadhaar program.