American online payment gateway PayPal on Wednesday moved the Delhi High Court against an order which ruled that it was a “payment system operator” under the Prevention of Money Laundering Act (PMLA) and has to thus comply with “reporting obligations” under it.

Senior counsel appearing for PayPal argued before a bench headed by Chief Justice Satish Chandra Sharma that the order passed by a single judge of the high court was “wrong”.

Senior advocate Mukul Rohatgi, appearing for the appellant, also said that the single judge’s order cannot be sustained in view of a recent decision of the high court on the issue of payment system operator. The bench, also comprising Justice Sanjeev Narula, listed the appeal for further hearing in September.

The Delhi High court has recently rejected PILs seeking to cease the operations of Google Pay as it was not a “payment system provider”. The court said Google Pay is a “mere third-party app provider” which requires no authorisation from the RBI.

On July 24, the single judge had set aside a penalty of Rs 96 lakh imposed on PayPal by Financial Intelligence Unit (FIU) — India for alleged non-compliance with the “reporting obligations” under the law against money laundering. It had also ruled that PayPal was liable to be viewed as a “payment system operator” and has to thus comply with “reporting obligations” under it.

The single judge’s order came on a petition by PayPal challenging the penalty imposed on it by the FIU.

PayPal cited the RBI guidelines to state that it only operates as an Online Payment Gateway Service Provider and is “not covered within the definition of a payment system operator or financial institution and in turn, not covered under the definition of a reporting entity under the PMLA”.