New Delhi: WhatsApp has built a system that stores payments-related data locally in India as the Facebook Inc.-owned messaging service begins the process of complying with data localization norms of the Reserve Bank of India (RBI).

A spokesperson for WhatsApp said it has started a pilot project with almost one million users in the country. “In response to India’s payments data circular, we’ve built a system that stores payments-related data locally in India," the spokesperson told Mint. “WhatsApp Payments is useful for people in their daily lives and we hope to expand the feature to all of India soon so we can contribute to the country’s financial inclusion goals."

WhatsApp’s move comes at a time when most payment firms still have limited data storage in India and are struggling to comply with the new data localization norms.

RBI has set 15 October as the deadline for all payment system operators to store data. Besides Visa, American Express, Facebook, PayPal, and Mastercard among others, Google and WhatsApp are also required to store their data.

At a meeting of Google’s chief executive Sundar Pichai and information technology (IT) minister Ravi Shankar Prasad at Google’s headquarters in Mountain View, US, in August, the company agreed to comply with the norms but sought time until end-December, a senior government official said in September, requesting anonymity. Google has yet to confirm the development.

A person aware of the development said the US-India Business Council is in talks with the government and RBI to resolve the issue. The person said while payment firms have sought extension of deadline, they are ready to comply.

These companies have however raised some technical queries on data storage and are awaiting the government’s response, the person said. Firms such as Visa Inc., Mastercard Inc. and Google Llc have also sought an alternative mechanism for data localization in meetings with government. Mastercard and Amazon did not respond to emails until press time. T.R. Ramachandran, group country manager, India and South Asia at Visa declined to comment.

The rollout of WhatsApp Payments in India has always been questioned by the IT ministry which sought clarity on whether the new (unified payments interface) UPI-based service conforms to RBI’s security and privacy rules.

In August, the Supreme Court also sought the response of WhatsApp on a plea alleging the company has not complied with the provision of appointing a grievance officer and other laws of India. The petition contended that WhatsApp is a foreign company with no office or servers in India and it is obliged to have its office and payments in India to run a local payments service.

“All system providers shall ensure that the entire data relating to payment systems operated by them are stored in a system only in India. This data should include the full end-to-end transaction details/information collected/carried/processed as part of the message/payment instruction," RBI said in its 6 April circular. It said for the overseas part of the transaction, the data may be stored in a foreign country.

After being at loggerheads with the Indian government on complying with laws and the mechanism to ensure traceability of fake messages, WhatsApp last month appointed Komal Lahiri as the grievance officer for India and listed out the process for users to flag concerns and complaints, including on fake news.

There were more than 200 million monthly active WhatsApp users in India as of February last year. The social media giant has more than 1.5 billion users worldwide.

Mint’s Shayan Ghosh in Mumbai contributed to this story.

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