WhatsApp a step closer to pay play
NPCI says platform has complied with data storage rulesWhatsApp is waiting for a formal communication from NPCI to launch a UPI-based payment system in India

Facebook Inc.’s WhatsApp unit is set to launch its payment services in India, with the National Payments Corp. of India (NPCI) informing the Reserve Bank of India (RBI) that the messaging platform has met data localization requirements.
An affidavit filed by RBI in the Supreme Court last week said NPCI had told the central bank in June that it was satisfied with WhatsApp’s compliance with the regulator’s data storage rules and was good to go live on the Unified Payments Interface (UPI) platform. WhatsApp is now offering the payments on a trial basis to some users.

“We would like to confirm that WhatsApp has satisfied the data localization requirements based on Cert-In auditor’s reports and we hereby are giving ICICI Bank (payment service provider bank for WhatsApp) the approval to go live," the affidavit submitted by RBI to the court said. Mint has reviewed a copy of the affidavit.
Payments data, information on payments or settlement transactions, customer data, among other information, has to be stored in India, according to RBI rules.
A WhatsApp spokesperson said the company is ready to provide payment services to users in India soon.
“We understand NPCI is satisfied with WhatsApp’s compliance with RBI’s payments guidelines on data localization. Our team has worked hard to meet these standards over the last year," the spokesperson said.
WhatsApp is waiting for a formal communication from NPCI to launch a UPI-based payment system in India.
“Now that NPCI has given clearance on data localization requirements nothing prevents WhatsApp from going live. It is only a matter of time now," an industry official said, requesting anonymity.
RBI’s submission to the apex court came in a public interest litigation filed by New Delhi-based think tank, the Centre for Accountability and Systemic Change, challenging WhatsApp’s pilot project for allegedly not adhering to data localization norms.
Data localization had become a thorny issue between the government and foreign firms in India after the banking regulator in 2018 said financial data will have to be stored in India.
Emails sent to RBI, NPCI and ICICI Bank remained unanswered till the time of going to press. While most global financial services firms initially said they will incur high costs for storing data in India, most of them have eventually complied.
"LocalCircles, the community social media platform had escalated the consumer ask of need for disclosure of data location for payments data with NPCI and RBI earlier this year after a series of issues were raised by consumers," Sachin Taparia, Founder and Chairman, LocalCircles said. “NPCI had reverted that all platforms that are live on UPI are fully compliant with data localisation, which unfortunately is a bit confusing for the common consumer", he added.
WhatsApp’s pilot run began two years ago by partnering with ICICI, while it awaited regulatory clearances to launch its UPI-based payments for its 400 million users in India, one of the company’s biggest markets.
The development assumes significance as the Facebook-owned firm is expected to capture a significant share in the fast-growing UPI-based payment landscape and pose a challenge to market leader Google Pay.
As of May, Google Pay commands a 42% market share in UPI transactions, while Flipkart-owned PhonePe has a 35% share. The remaining 23% is with Paytm, Amazon Pay, Bharat Pe and others, Mint reported on 30 July.
UPI allows users to transfer money without sharing details of the beneficiary’s bank account. UPI-based payments clocked a record 1.49 billion transactions in July.
Shayan Ghosh & Gopika Gopakumar contributed to the story.
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