WhatsApp To Rope In Third Party Auditor To Clear RBI’s Data Localisation Hurdle

Hopeful of launching WhatsApp Pay within this year, WhatsApp reportedly said it will rely on a third party company to audit its payments system and ensure that it complies with Indian data localisation rules.

In response to the Reserve Bank of India’s affidavit, the company has told the Supreme Court that it has submitted a revised data localisation plan to all its stakeholders. WhatsApp, however, did not disclose the name of the company it has selected for audit, reported ET.

In its response, the company has also reassured the Supreme Court that the payment service will be rolled out in India only after the company complies with the RBI guidelines and receives appropriate approval from the National Payments Corporation of India (NPCI).

Just yesterday, it was reported that the company is now sorting some engineering work, following which it will comply with the RBI data localisation guidelines which mandates all payments companies to store user data in local servers.

WhatsApp has been facing regulatory compliance issues in India which have been delaying the launch of its payment service in India.

While other online payment companies such as Paytm has already complied with the data localisation guidelines, WhatsApp had come up with a way to merely mirror or copy payments data within India, while also storing the same data in its overseas servers.

Last month, the central bank had filed an affidavit to the Supreme Court stating that WhatsApp had not complied with its data localisation norms. The RBI had also said it is exploring regulatory actions to expedite compliance of data localisation.

A Delhi-based NGO, Centre for Accountability and Systemic Change (CASC), had filed the petition alleging that WhatsApp has not complied with RBI’s April 6, 2018, data localisation circular.

WhatsApp Pay was expected to launch in India in May 2018 however the launch was delayed as the central government directed that the company can’t launch WhatsApp Pay till it sets up an office and recruits a team in India.

The beta version was also launched in May last year, however, the test was discontinued due to issues related to localisation.

The ministry of electronics and IT (MeitY) had also written to the NPCI seeking a clarification on how WhatsApp Pay will abide by Indian laws on sharing of user data. The ministry further asked the NPCI to check that all compliances are in place before WhatsApp is allowed to scale up its services.

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