To meet RBI demands, WhatsApp has finally set up its data storage facilities in India and is reportedly preparing for the full launch of its UPI payments app in association with ICICI Bank. earlier in April, Inc42 reported that WhatsApp may take up to five months to comply with the country’s data localisation norms to launch its payments service — WhatsApp Pay.
In an email response then, a WhatsApp spokesperson reportedly said that it was working closely with banks, NPCI, the government and other payment service providers to support India’s digitisation agenda.
In April 2018, the RBI had issued a circular asking all payment system operators in the country to store data – pertaining to their customers – within India to ensure that user details remain secure against privacy breaches. They also had to get a third-party audit done by CERT IN-empanelled auditors.
While the Indian players like Paytm took no time to comply with the norms, WhatsApp and other foreign players active in payment domain were seeking a bit of relaxation in terms of securing mirror or copy payments data within India, while also storing the same data in its overseas servers. The list included Visa, Mastercard, American Express and the likes of Pay-Pal, Google Pay, Amazon Pay, as well.
However, RBI maintained its stand. This significantly affected the timeline of WhatsApp Pay’s rollout in India. In June 2018, almost 1 Mn people were testing WhatsApp payments at the beta stage in India out of company’s over 200 Mn Indian users, and the company is still trying to seek approvals for the full launch.
Going ahead, RBI has toughened its stand on companies processing data outside India and has set a 24-hour deadline for the companies to bring back all data back to the country in such cases. These directives were applicable not only to payment entities but also to all banks operating in India.
According to NITI Aayog’s ”Digital Payments (2018 edition)”, India’s digital payments industry is estimated to grow to $1 Tn by 2023. It also suggested that the value of digital payments will likely jump from the current 10% to over 25% by 2023.
Further, Digital payments in India is expected to double to $135.2 Bn in 2023 from $64.8 Bn this year, according to an Assocham-PWC India study. Also, the government’s push to boost UPI transactions is further opening up opportunities for the new players.
[The development was reported in ET epaper dated June 27, 2019.]