Uzbekistan’s data localization law hinders entry of Apple Pay and Google Pay

On September 18 of this year, a government resolution aimed at developing tourism was adopted. It tasked ministries and agencies with creating favorable conditions for tourists and digitizing business processes.

Specifically, clause 8 of the resolution mandates that by the end of 2024, negotiations must be held with international online payment companies (such as PayPal, AliPay, UniPay, Apple Pay, and Google Pay). The goal is to ensure their integration into Uzbekistan’s payment systems and banking services and, if necessary, to develop proposals for revising national legislation. The Central Bank, the Ministry of Digital Technologies, and the Tourism Committee were designated as the executors of this task.

A Kun.uz reporter reached out to the Central Bank to inquire about progress in implementing this resolution.

According to the bank, throughout 2024, negotiations were held several times to link Visa and Mastercard cards issued by local banks to the Apple Pay and Google Pay systems.

"During these negotiations, Apple and Google indicated that it would be necessary to revise certain provisions of Uzbekistan's current legislation, particularly specific requirements in the Law on Personal Data, in order to link bank cards issued within Uzbekistan to their payment systems.

Furthermore, in a presentation by Google, it was emphasized that personal data is stored in Google’s information systems. To address potential risks associated with the entry of Google Pay technologies into the country’s payment services market, relevant conclusions from state authorities regulating the personal data sector are required," the Central Bank explained.

The bank added that steps are currently being taken by the Ministry of Digital Technologies, the Ministry of Investments, Industry and Trade, and the Central Bank to revise the legislative requirements and introduce Apple Pay and Google Pay services in Uzbekistan.

The regulator also noted that since 2019, foreign tourists from countries where Apple Pay and Google Pay operate have been able to make payments within Uzbekistan through Humo payment system terminals.

About Article 27-1

The norm that has been identified as a barrier to the entry of international payment systems into Uzbekistan is Article 27-1 of the Law on Personal Data, adopted in 2021.

This article requires that personal data of Uzbek citizens be collected or stored on technical means physically located in Uzbekistan and registered in a state registry.

The introduction of this law faced criticism from major IT companies and the public. Following its enactment, on November 3, 2021, almost all major social networks and messaging platforms were blocked in Uzbekistan for several hours, resulting in millions of dollars in losses for businesses and entrepreneurs.

In the aftermath of this incident, several officials were dismissed from their positions. Subsequently, the law’s provisions were no longer enforced for any entity except TikTok.

Recently, during an open dialogue with entrepreneurs on December 20, 2024, President Shavkat Mirziyoyev addressed the issue. A representative of TBC Group suggested amending the legislation to allow personal and banking data to be stored in the cloud, highlighting the problems caused by current regulations. The president emphasized the seriousness of the issue and noted the need for a well-thought-out solution.