WhatsApp Pay could go live in five months, undergoing third-party audit: Report

Currently, only around 7 lakh WhatsApp users in India can use the WhatsApp Pay beta feature

WhatsApp has been trying in vain to get its payments service, WhatsApp Pay, running in India. Right now, it is only available to a fraction of its total user base for testing purposes, a number which is speculated to be 7 lakh users. If reports are to be believed, WhatsApp Pay could go see a public launch in the second half of 2019.

According to a report by The Economic Times, two bankers privy to the matter have told it that WhatsApp Pay could take five more months to fully localise its payments data and go live in India. Currently, only a fraction of the 200 million active WhatsApp users in India can use the WhatsApp Pay feature and they can only do small value transactions which has been allowed by the National Payments Corporation of India (NPCI).

WhatsApp Pay beta is available to a fraction of the total no of WhatsApp users. Image: tech2/Anirudh Regidi

WhatsApp Pay beta is available to a fraction of the total no of WhatsApp users. Image: tech2/Anirudh Regidi

WhatsApp Pay just like most of its competitors in the mobile payments segment using the Unified Payments Interface (UPI) for transactions. It started offering this service in partnership with ICICI Bank and then added Axis Bank, HDFC Bank and the State Bank of India to its list of partners.

According to WhatsApp, it is working closely with NPCI, banks and government officials to ensure that its payment service supports India's digitalisation agenda.

The Reserve Bank of India (RBI) regulations state that companies dealing with payments or financial data of Indian customers, need to have servers within the country which have to be audited by CERT-In appointed auditors. The bankers privy to the matter have told ET that localisation of payments data storage, third-party auditing and complying with all the technical requirements will take till August or September.

WhatsApp Pay woes

WhatsApp Pay has run into its own set of troubles ever since it first started to be tested in India. According to the rules of UPI, as long as you have a virtual address, it does not matter which UPI service you use, you are eligible to accept payments to this account or pay from this to any other account. WhatsApp Pay when it started, used the UPI model but only allowed payments from one WhatsApp user to another. Even in WhatsApp's Android beta app, the option to send money to non-WhatsApp customers is well hidden behind six steps/screens according to an IANS report.

In February 2018, Deepak Abbot, the senior vice president at Paytm claimed that WhatsApp had custom-implemented UPI which was unfair and didn't provide a level playing field to its competition. Abbot also said that this implementation wasn't secure and flouted the norms laid down by the NPCI.

Paytm founder Vijay Shekhar Sharma had tweeted at the time, "After failing to win the war against India's open internet with cheap tricks of free basics, Facebook is again in play. Killing beautiful open UPI system with its custom close garden implementation. I am surprised, champions of open @India_Stack, let it happen!"

The use of WhatsApp to spread fake news in the second half of 2018 which was the alleged cause of the death of over 30 innocent people due to mob lynchings was another reason the WhatsApp Pay service has been delayed.

In an affidavit submitted to the Supreme Court at the end of March, the RBI stated that WhatsApp was yet to comply with the data localisation norms laid down close to a year ago. The bank regulator further mentioned that it may have to resort to regulatory actions to expedite compliance of data localisation. In April 2018, the RBI had issued a circular asking all payment system operators in the country to store all customer data within India. The move was geared towards ensuring that user details remain secure against privacy breaches. After spending more than a year being stubborn on its stance to not comply with the Reserve Bank of India's data localisation guidelines, WhatsApp has now stated that the company is ready to abide by RBI's recommendations.

(Also Read: WhatsApp Payment feature can disrupt mobile payments space but it still needs to address some issues)

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