WhatsApp May Take 5 Months To Comply With Data Localisation Norms: Report

WhatsApp may now take up to five months to comply with the country’s data localisation norms to launch its payments service — WhatsApp Pay.

A media report citing two bankers in the know said that WhatsApp has been permitted to beta-test its payments product within a limited user base of 1 Mn, after its beta-test last year faced opposition in the industry. Also, the company has been allowed only small-value transactions by the National Payments Corporation of India, which runs the Unified Payments Interface railroad.

In an email response, 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. The payment system companies had been given six months to comply with the localisation norms.

While several players such as Paytm etc complied with the norms, WhatsApp with its payment system had been seeking approval to merely mirror or copy payments data within India, while also storing the same data in its overseas servers.

However, Indian regulators continued to push for full compliance for WhatsApp to be able to launch its WhatsApp Pay service beyond the beta stage. In June 2018, almost 1 Mn people were testing WhatsApp payments in India out of company’s over 200 Mn Indian users.

In August 2018, the central government had ruled that the company will not be allowed to launch its payment service WhatsApp Pay in India till it complies with the demand.

After reports surfaced that WhatsApp Pay is ready to adhere to data localisation demands, the company had also reportedly roped in a third party company to audit its payments system and ensure that it complies with Indian data localisation rules.

Once it gets the data localisation clearance, WhatsApp Pay is looking to challenge payments majors such as Paytm, PhonePe and GooglePay in the battleground of the Indian digital payment sector, which is expected to grow five-fold to reach $1 Tn by 2023.

[The development was reported by ET.]