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The National Payments Corporation of India has given its approval to WhatsApp to ‘Go Live’ on UPI in a graded manner. The instant messaging platform has been testing the payment method for over two years but the expansion was stalled due to privacy concerns.

NPCI has given approval for WhatsApp to ‘Go Live’ on UPI in the multi-bank model after the data localisation requirements have been met.

WhatsApp can expand its UPI user base in a graded manner starting with a maximum registered user base of twenty (20) million in UPI.

The announcement was made immediately after NCPI said that with UPI reaching 2 billion transactions a month and with potential for future growth, it has issued a cap of 30% of total volume of transactions processed in UPI, applicable on all Third Party App Providers (TPAPs).

This new cap will come into effect from 1 January, 2021. The organization claims that this move will help to address the risks and protect the UPI ecosystem as it further scales up.

The cap of 30% will be calculated basis the total volume of transactions processed in UPI during the preceding three months (on a rolling basis).

The existing TPAPs exceeding the specified cap, will have a period of two years from January 2021, to comply with the same in a phased manner. Currently Google Pay and Phone Pe are two of the biggest players in the market with each commanding a market share of around 40%.

WhatsApp had planned to debut its payment services in India. However, the Facebook-owned company was not able to do so in time as it was not able to meet the data localisation needs setup by the Indian government. Currently, the application is offering payment services on a trial basis to around 1 million people in India.

WhatsApp will be using ICICI Bank as its partner bank in providing UPI services. Other popular UPI applications like Google Pay and Phone Pe have two banking partners.

According to RBI rules, payments data, information on payments or settlement transactions, customer data, among other information, has to be stored in India for the platform to get approval.

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