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India’s Data Law: What It Means for Global Payments

Rakshatha Murching

• 3 min read
India’s Data Law: What It Means for Global Payments

The Hidden Complexity of Cross-Border Payments

For modern businesses, international payments may seem straightforward, just a transfer of funds from one account to another. However, beneath the surface lies a complex web of sensitive personal data flowing across borders. Each payment instruction carries names, account numbers, and identification details, shared with multiple financial institutions to complete the transaction.

This data exchange has long operated under outdated regulations, but India’s Digital Personal Data Protection Act, 2023 (DPDP Act) is a game-changer. It rewrites the rules for data privacy, directly impacting businesses that interact with the Indian market.

The DPDP Act: A New Era of Data Protection

India’s Digital Personal Data Protection Act, enacted on August 11, 2023, is the country’s first comprehensive data privacy law. It replaces the outdated Information Technology Act of 2000 and introduces a robust framework for protecting personal data.

The Act applies to any entity processing the digital personal data of individuals in India, regardless of where the business is based. It’s not just a set of guidelines, it has enforcement power. The Data Protection Board of India monitors compliance and can impose penalties of up to ₹250 crore (approximately $30 million) for breaches, such as failing to implement adequate security measures.

This signals a clear message: data protection is now a board-level priority, requiring dedicated resources, budgets, and oversight.

The Compliance Timeline: May 2027 is the Deadline

Although the DPDP Act was passed in 2023, its provisions are being implemented in phases to give businesses time to adapt. A key notification from the Ministry of Electronics and Information Technology, issued on November 13, 2025, sets the final compliance deadline.

By May 13, 2027, businesses must align their systems and processes with the Act’s requirements, including consent management, security safeguards, data erasure, and breach notifications. This grace period is an opportunity to overhaul legacy systems, renegotiate data-sharing agreements, and embed compliance into workflows.

Cross-Border Payments: A Data-Intensive Process

International transactions are inherently data-heavy, making them a focal point under the DPDP Act. Each payment involves a chain of intermediaries, with sensitive personal data passed along the way.

Under the Act, the business initiating the payment is the Data Fiduciary, responsible for determining the purpose of data processing. Partners in the chain, such as banks and compliance agents, act as Data Processors.

To process a single payment, businesses handle:

  • Personal Identification Data (KYC/KYB): Government-issued IDs, addresses of directors, and Ultimate Beneficial Owners (UBOs).
  • Transactional Data: Bank account numbers and payment instructions.
  • Compliance Screening Data: Names of remitters and recipients checked against sanctions lists for anti-money laundering (AML) and counter-terrorism financing (CFT).

This data is shared with banking partners, the SWIFT network, and third-party compliance agents, creating multiple points of liability. A breach at any point in this chain could result in penalties for the Data Fiduciary.

Thriving in the New Data Privacy Era

The DPDP Act challenges businesses with legacy systems but offers opportunities for those adopting a compliance-by-design approach. Here’s how businesses can adapt:

a. Map Your Data and Vet Partners

The Act requires data to be processed only for lawful purposes. Businesses must evaluate the data they collect and the partners they share it with. For example, a rigorous Know Your Customer (KYC) and Know Your Business (KYB) process ensures data collection is lawful and partners are trustworthy.

b. Implement a Defensible Data Lifecycle

Businesses must demonstrate clear governance over the data they control. A structured framework should map the entire data journey:

  • Incoming Data: Collection and verification.
  • Data Processing: Structuring and usage.
  • Outgoing Data: Controlled sharing and transmission.

This creates a defensible audit trail for regulators.

c. Embed Security and Compliance into Workflows

The Act’s highest penalties target failures in security safeguards. Businesses must integrate compliance checks into their operations. For example, modern fintech providers like GlomoPay offer real-time screening of transaction participants against global sanctions lists, automating compliance and reducing risk.

Preparing for the Future of Data Privacy

The DPDP Act is a fundamental shift in India’s regulatory landscape, making compliance a cornerstone of market access. Businesses with legacy systems that treat data as an afterthought face significant risks.

As the 2027 deadline approaches, the question isn’t whether to adapt but how. Is your business ready for this new era of data privacy? And is your financial partner equipped to support compliance in a rapidly evolving landscape?