WhatsApp Pay was expected to go live for all users by the end of March, which has been impacted by the Cambridge Analytica episode.

Privacy issues at Facebook may further delay official launch of WhatsApp Pay
Atom Digital Payments Thursday, June 07, 2018 - 09:12

There appears to be a further hold up in WhatsApp’s plans to kickstart its digital payments and e-wallet feature ‘WhatsApp Pay’ in India, according to an Economic Times report. As per the original plans, the facility was expected to have been made available to all the 200 million+ user base that WhatsApp enjoys in the country. Then the Cambridge Analytica episode exploded and Facebook found itself in a deep hole.

In addition to this, the recent directive of the Reserve Bank of India that those operating in the digital financial space must retain their data in servers located within the territorial jurisdiction of India and not outside may also be adding to the delay.

A pilot  involving around 70,000 users has already been conducted and three major private sector banks, HDFC Bank, ICICI Bank and Axis Bank are fully ready with their support infrastructure that can handle the transactions through WhatsApp Pay once the facility is opened to all 200 million. The third bank in the ecosystem, the State Bank of India would have joined a little later. As such, WhatsApp had the permission to include 1 million of its users in the pilot scale rollout since the stipulation was 1% of the user base or 1 million, whichever is higher.

Though there is no official word from Facebook or WhatsApp on when the big rollout will take place or the reasons for the delay, the main concern relates to the data privacy issue arising out of the Cambridge Analytica controversy and Facebook would want to be absolutely sure that it can assure total protection of user data particularly when it is entering the financial transactions space.

There are those who feel the issue may not be so serious since the financial part of the data relating to the users will remain on the Banks’ side of the ecosystem and will not be captured by WhatsApp and the question of privacy and protection of financial data by Facebook or WhatsApp is a non-issue.

The other sticky point is the 2-stage authentication for every financial transaction that is the norm now and followed by the other digital payments operators like Paytm, Tez and Flipkart’s PhonePe.

Again, WhatsApp is trying to argue that the fact that the device used by their users by itself is one stage of authentication and it has the provision to include one more PIN before the transaction occurs on its platform.

It may therefore be a while before these issues are completely sorted out and you can start using WhatsApp Pay on your mobiles.

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