The great Indian data grab: Is India’s credit information moving into foreign hands?

Nobel laureate Gabriel Garcia Marquez’s meandering novel Love in the Time of Cholera writes of a continual but varied love between different protagonists from youth to old age, with a leading pair to anchor the story. This love itself, a main character, is not just an emotion but an all-consuming force that keeps mutating. The novel contrasts decades of passionate longing, letters pored over, short affairs that inevitably occur, denial, lies, confessions, underpinned by the virtues of companionable, respectable marriage. The cholera is the possibility of lurking disease and sudden death in the backdrop.

Attempts to make money are similar in their energy. The everlasting quest between potential seller and buyer is fuelled by an unquenchable, amoral, immortal ambition. Nowadays, it is not enough to be enticing via advertisements and brand ambassadors. The commercial engine wants an inside track like the Watergate break-ins. This is via the collection of profile and financial data, history, habits, all to be yoked together with new-fangled artificial intelligence and super-fast data crunching.

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Meta, which grew out of a Harvard college room and began as Facebook those decades ago in order to connect students on campus, has recently paid $900 million for a 20 per cent stake in the Indian firm CRED. This, while hiring its founder, Kunal Shah, as head of WhatsApp worldwide. The platform is one of Meta’s prior acquisitions. WhatsApp now has an Indian consumer base of 500 million people. CRED has more than 17 million users via incentivisation to join. It processes more than 40 per cent of credit card payments in the country. Obviously, its database contains a lot of the better-heeled.

You can already see the Love in the Time of Cholera-style meandering. It is tentacular, going relentlessly into mostly American hands. More so, when you contemplate the money flows. Who can resist fat American dollar offers? Certainly not the bright Indians who create marvellous digital architecture such as Aadhaar and UPI, and brilliant payment apps, acknowledged as the best in the world.

Walmart, via its purchase of Flipkart, now controls 72 per cent of PhonePe. Google owns Google Pay, of course, and Meta owns WhatsApp Pay with its 500 million potential Indian users. That’s more people than the populations of several Western countries put together. And remember, India is growing at roughly 7 per cent in GDP year on year. It has a middle class with purchasing power approaching 750 million people.

India offers a humungous consumer market with its 1.5 billion-strong population, the biggest in the world now. China may be almost as populous, but it controls its own digital architecture and financial apps 100 per cent, with no foreign interests whatsoever. However, its consumers are concentrated in urban hubs and are not so spread out as in India, with its multiple tiers of cities and towns all full of aspiration.

The fig leaf that allows access to it all is called consent. But every time an individual or organisation uses a private financial app, the process involves agreeing to a lot of profile and credit information, including past transactions, spending habits, and so on, passing over seamlessly to forces unknown. This information can be used in a variety of ways — to sell various goods, services, financial products, insurance, wealth management, offer loans, buy property, and, if things go awry or there is motivation towards it, lead to cyber-attacks via compromised passwords and other data on online platforms connected to laptops and smartphones.

India also has official credit profiling organisations. These collect and analyse credit and loan repayment data to calculate credit scores for individuals and credit rankings for businesses. But even here the meandering tentacles of foreign entities are apparent. CRISIL is an S&P company, ICRA is an affiliate of Moody’s, and another, IND-RA, is affiliated with Fitch. So, sovereignty over financial and other data does not exist.

It is reasonable to conclude that, despite some government oversight from the RBI and SEBI, the entire space is infiltrated by mostly American organisations. It is already too late to worry about credit information slipping into foreign hands, though purchases such as the one just made by Meta may give us a jolt. Perhaps the consequent goods and services available to Indians benefit from international ownership. Many countries have little problem with selling most things not directly connected to national security to others. What frenemies like China and outright enemies like Pakistan could do with our data is worrisome, but the horse nevertheless seems to have bolted. To worry about it in nationalist terms, despite the security implications, is futile without the indigenous investment and infrastructure to go with it. The motive forces are a combination of the passion of uncontrolled love combined with the logic and sedateness of marriage.

Gabriel Garcia Marquez knew what he was writing about and the vagaries of human nature, even though it is difficult to see the substance in the arguments of people who bemoan the transfer of Indian financial data to foreign hands without the ability to offer alternatives. Are they failing to acknowledge a ground reality? In the end, nobody can sell you anything unless you are willing to buy. Buying and selling is a lot like love, after all.

(The writer is a Delhi-based political commentator. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect Firstpost’s views.)