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WhatsApp may become payment platform in India soon

By Juliet Umeh

Social media platform, WhatsApp may soon join the league of payment platforms in India.

This will be possible after the country’s Supreme Court gives its final verdict on the new platform, WhatsApp Pay.

A source has disclosed that the nodal agency for retail payments in the country, the National Payments Corporation of India, NPCI, has already given it the go-ahead, saying WhatsApp Pay has fulfilled all data localization norms.

It said however that WhatsApp Pay can go live only after the apex court gives its final verdict in a case in which several parties, including the Reserve Bank of India, RBI and the government has been made a party.

The source said: “The letter of approval to WhatsApp has still not been issued. It may take some more time.”
Rivals Google Pay and Walmart-owned PhonePe were given permissions by NPCI, as it is authorised to permit UPI-based payment services.
However, the approval for WhatsApp Pay to go live had become complicated due to several issues.

Previously, NPCI first announced on February 16, 2018 that WhatsApp had been approved for beta testing of its UPI-based service in India for one million users.

Soon after, the Ministry of Electronics and IT (MeitY) wrote a series of letters — first in March and then in May — questioning critical issues such as its compliance with the RBI’s two-factor authentication norms, its user data storage policy and about sharing of data with its parent Facebook.

In April 2018, the RBI issued a circular mandating data localisation by all system providers. Subsequently, in July 2018, Centre for Accountability and Systemic Change (CASC) — a think tank — filed a petition before the top court seeking that WhatsApp comply with RBI data localisation norms and appoint a grievance officer in India.

The RBI and the government were subsequently made a party to the case, with a similar plea by another petitioner, G2 Chambers, being tagged with CASC’s original petition. WhatsApp later questioned the credentials of G2 Chambers.

In October 2018, WhatsApp said it had complied with all data localisation norms and its then CEO Chris Daniels wrote to the RBI seeking permission to roll out the service. RBI then reached out to NPCI and MeitY for their response on the CEO’s email.

NPCI also queried rival Google Pay on the status of its own data localisation after accusations that WhatsApp was not being given a “level playing field”.

In January 2019, RBI was made a party to the CASC petition and in November that year the banking regulator stated that WhatsApp was yet to fully comply with its data localisation norms. It identified five areas where WhatsApp had to plug the gaps. The instant messaging firm said it would comply with all norms by May this year.

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