The much-delayed WhatsApp Pay, the digital payment solution that integrates payments in the messaging app and lets users send and receive money, may finally get going in India if things go as per plan for the Facebook-owned entity. 

The Reserve Bank of India (RBI) has reportedly told the Supreme Court of India that the National Payments Corporation of India (NPCI) has confirmed that WhatsApp is now fully compliant with the data-localisation norms — the point on which the rollout of the service has been held back.

The Economic Times reports that that in a letter dated June 5, NPCI, which manages the Unified Payments Interface (UPI), told the RBI that WhatsApp has now satisfied data-localisation norms for payments service. 

“NPCI has reviewed the ‘Post-Change Review Report III’ certified by the independent third-party CERT-In empanelled auditor of WhatsApp — Deloitte. We submit herewith that we derive comfort from the reports submitted by Deloitte with regards to WhatsApp’s full compliance in the remaining three points on data storage guidelines issued by our office and accordingly complies with all five points in lines with requirements advised through your (RBI) letter dated November 1, 2019,” the Economic Times report quoting the letter to the RBI said.

Deloitte was chosen to audit its compliance after NPCI had asked it to make certain changes with regard to localisation of data.

RBI’s response is part of the proceedings in a Public Interest Litigation (PIL) filed against WhatsApp Pay by the think-tank Centre for Accountability and Systemic Change (CASC).

CASC had wanted the apex court to stop WhatsApp’s trial with 1 million users, and direct the Reserve Bank of India (RBI) to put on record the permission granted for the trial and disclose all communication between WhatsApp, the National Payments Corporation of India (NPCI) and itself.

WhatsApp Pay has been running a pilot project with 1 million users for nearly two years. It has yet to receive permission for a full rollout with all its 400 million Indian users because it has not yet completed storing all data within the country’s borders.

Still few more hurdles to clear

But RBI’s latest disclosure to the Supreme Court does not naturally confirm that the WhatsApp Pay has got the nod. But this certainly marks a major step in resolving the conflict that has held back the much-expected service.

WhatsApp Pay beta-tested in India in 2018, and it amassed 1 million users. The beta was launched in February 2018 and offered P2P capabilities when users linked their accounts to a bank account. And it did go on to meet the RBI’s data localization regulations prior to the October 15, 2018 deadline by providing domestic data storage. 

There is still some conflict between the government and WhatsApp. The messaging platform is not ready to comply with the requests to reveal the source of messages. WhatsApp is holding its ground that it is not ready to break the sanctity of end-t-end encrytion that it offers its users.

A WhatsApp spokesperson had earlier said they were constantly working with the government to deliver access to payments feature to all of its users. Payments on WhatsApp is expected to significantly accelerate digital transactions in India, especially in the current Covid-19 crisis.

The social messaging app has more than 400 million users in India and more than 2 billion users worldwide. With these many subscribers to the app, India is the largest market for the app currently.

Jio looking on with intent

WhatsApp Pay service, if and when it is offered in India, is expected to create a major splash in terms of digital transactions. WhastApp Pay aims to take on already established digital payment gateways in the country, mainly Google Pay, PhonePe and Paytm.

WhatsApp is well primed for this contest, it would appear. Its parent Facebook bought a 9.9% stake in Reliance Jio for ₹43,574 crore. The partnership between Facebook and Jio is unprecedented in many ways. Jio Platforms has an estimated user base of over 380 million across the country. Jio is betting big on WhatsApp Pay to carry on its ambitiouse-commerce forays.

WhatsApp Pay is expected to follow the tracks of China’s WeChat Pay, which leverages on the popularity of its parent platform. WeChat Pay is a top player in China’s mobile payment market, with 800 million monthly active users (MAU), and its success is largely due to it being part of WeChat’s ecosystem, which boasts over 1 billion MAU.

Last week, WhatsApp India head Abhijit Bose said it can bring at least 200 million of its users to UPI, which is seeing steady growth in digital payments amid the pandemic. WhatsApp has plans too to start multiple pilots in areas like digital lending, micro-insurance and micro-pension in 18 months.

Brazil is another place where WhatsApp Pay was launched earlier this year. As it happened, it was suspended immediately to “preserve competitive environment” just after a week of its launch.

Source: Economic Times.

 

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