In an attempt to sort out the issue, the government has proposed that copies of the data be stored in India, while the companies continue with their offshore storage, Reuters reported.
The three firms will have to spend a few million dollars apiece to ensure that they conform to the Reserve Bank of India's demand that all payments data should be stored within India's borders for “unfettered supervisory access”.
The report quoted India's Economic Affairs Secretary S.C. Garg as saying that keeping copies of the data had emerged as a possible way out during a meeting in June between RBI officials and payment company executives.
Concerns over data localisation have grown in recent years as multinational companies obtain business contracts abroad. In February, Apple agreed to store iCloud data of Chinese customers with a local firm as a condition of doing business in the country.
Recently, when Microsoft acquired code repository GitHub, there were fears expressed that the American spy agency NSA could have access to all the source code residing on the hub. Microsoft has in the past provided the NSA with access to its systems.
The RBI's order comes as people switch to credit cards, with the memory of scarcity of cash after Prime Minister Narendra Modi suddenly decided to replace currency notes in November 2016 still fresh in their minds.
Some say that the US Government, working through global financial institutions and big tech organisations, such as eBay, Microsoft, MasterCard and Visa, is the key driving force behind the push to eliminate cash from the global financial system.
In March, Indians spent about US$52 billion using their 900 million credit and debit cards, according to RBI data. This was almost double the amount spent using cards in November 2016.
The American lobby group, US-India Business Council, said at the June meeting that keeping the data only in India would mean that in the event of a natural disaster, there would be no access to it at all.
Garg said the government was attempting to arrive at a solution acceptable to both sides.
“What we do is we listen to different stakeholders, what they say, what their stance is and where can we can find a landing zone ... That is the reason why it was suggested to have mirror copies,” he said.