BENGALURU: WhatsApp has set up data storage facilities within India for its payments business, according to two people in the know, paving the way for a full fledged commercial launch of digital payment services by the Facebook-owned messaging app.
The development marks a major milestone for the country’s banking regulator, which has been firm in its demand that global payments companies store transaction data pertaining to Indian users within the country.
WhatsApp is expected to go live with its Unified Payments Interface-based service with ICICI Bank and services through Axis Bank, HDFC Bank and SBI are likely to follow, said one person quoted above.
“WhatsApp has completed the necessary work on data localisation and has moved to the audit process. Once the auditors submit the report to the regulator, the company can go live with its payments application,” a source told ET.
The Reserve Bank of India requires payments companies to first set up data storage facilities in India and then submit an audit report to the central bank. The audit has to be conducted only by auditors empaneled with the Indian Computer Emergency Response Team, CERT-IN.
WhatsApp said they did not have anything new to comment on the matter.
ICICI Bank did not reply to ET’s queries on the matter.
National Payment Council of India declined to comment.
WhatsApp’s payment service, which was launched as a pilot programme over a year ago, has been mired in a series of regulatory issues ranging from the demand to store data locally to charges of misinformation and fake news being shared on the messaging platform as well as privacy concerns at parent company Facebook.
WhatsApp had tried to launch its payments feature in partnership with ICICI Bank in February last year but had to limit it to a beta service only.
“Now that one of the major concerns around localisation of data has been addressed, the payments offering can go live,” said one of the people who briefed ET on the development.
In a note released on April 6, 2018, the RBI had said that “all system providers shall ensure that the entire data relating to payment systems operated by them are stored in a system only in India”. It further issued a clarification on Wednesday specifying that all domestic payments data that is processed outside India also needs to be brought into the country within 24 hours and stored locally.
Earlier this year, online retail major Amazon adhered to data localisation guidelines and went live with its UPI-based payment service in partnership with Axis Bank.
According to the most recent data shared by NPCI, there are 39 third party applications like Google Pay, Amazon, Uber and Ola that are accessing UPI as a payments platform.
Source: Economic Times