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Payments proving to be one hurdle too many for WhatsApp

, ET Bureau|
Updated: Sep 10, 2018, 06.47 PM IST
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Whatsapp
Since WhatsApp only had a limited pilot launch, only NPCI clearance was sought.
BENGALURU: The light at the end of the tunnel keeps getting bleaker for instant messaging platform WhatsApp as its plans of launching payments in India is held up in regulatory and political entanglements.

Multiple bankers and payment industry insiders ET spoke to said that chances of WhatsApp going live anytime soon seems bleak inspite of them having implemented all the design rectifications as requested by the National Payments Corporation of India.

“Privacy issues around their parent company Facebook coupled with fake news spreading through WhatsApp has caused a major dent in their brand here, hence going live on financial services would be extremely difficult now,” said a senior executive of a private sector bank on the condition of anonymity.

Further data localisation norms of the RBI have also caused them to halt their aggressive plans on starting payment services here. Besides WhatsApp, Amazon and Apple too have put brakes on their plans to launch payments in India through UPI.

“Unless the issue around storage of payments data within India is sorted out none of the global giants who have data centres globally will be able to go live,” said the person quoted above. “Though WhatsApp has implemented all the design requirements for UPI as specified by NPCI, till the data localisation issue is addressed they will not be able to go live.”

Simultaneously a Right to Information plea filed with the Reserve Bank of India has revealed that the RBI did not give any explicit consent to NPCI to allow WhatsApp to launch pilot payments. “RBI has not approved consent given by NPCI to allow WhatsApp to launch and provide payment services to its users in India,” said RBI in a written response to a RTI filing. ET has a copy of the RTI filing along with the answers from the RBI. The name of the applicant has been left anonymous upon request from the applicant.

When ET reached out to multiple stakeholders for a response, NPCI which manages the UPI railroads said: “Timeline to go full-scale live depends on the app provider’s compliance to data localisation. We keep RBI informed for all large providers going fullscale live on a multibank model once all the compliance requirements are fulfilled.”

Further replying to ET queries, an ICICI Bank spokesperson said: “ICICI Bank is one of the PSPs for UPI payment with WhatsApp. In line with the NPCI guidelines for third parties to go live and process payments on the UPI platform, ICICI Bank has launched a pilot beta version with limited features for testing with required approval from NPCI.”

RBI and WhatsApp did not respond to ET queries.

Bankers in the know of the matter said banks were supposed to seek RBI consent after April 16 for the final launch of the payments product. Since WhatsApp only had a limited pilot launch, only NPCI clearance was sought. Later WhatsApp got entangled in multiple controversies causing the final launch date to get postponed.
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