Digital Payments
RBI told the Supreme Court that it has directed National Payments Corporation of India to not allow a full-scale launch of WhatsApp’s payments business on UPI.

The wait for a full-scale launch of the payments feature on WhatsApp grows longer as the Reserve Bank of India has found that the messaging app company is yet to fully comply with egulations. The main factors found wanting with WhatsApp is that it has not made arrangements for storing of data locally, a basic condition RBI has for all digital payments players. 

This was expressed by RBI in a report it submitted to the Supreme Court of India.   

The Supreme Court is seized of the matter since there is a petition filed in the apex court by Centre for Accountability and Systemic Change (CASC), an activist organisation that WhatsApp has not nominated a local grievance officer and is not in compliance. The CASC made RBI a party to this appeal. The plea to the SC was to stop the company from launching its WhatsApp Pay service on its app.

The Supreme Court had asked the Reserve Bank of India to file its status report in the case and the response filed in the court by RBI is now in the public domain.

RBI has marked a copy of its response to the National Payments Commission of India, NPCI since it is the nodal agency that monitors the Unified Payments Interface (UPI), the vehicle WhatsApp plans to use on its platform for transactions. RBI has stated to the SC that the NCPI has submitted its report on the setup being put in place by WhatsApp and as per this there are critical data that are being stored outside the country and they are being held beyond the stipulated number of days as well. The data elements referred to are transaction ID, expiry of collect request and retrieval reference number etc. Some of the information left in their servers can contain transaction data which is private and should not be disclosed to third parties.

Based on this NCPI report, RBI has directed it not to allow WhatsApp to go ahead with its rollout of the payments feature.  

WhatsApp has not reacted to this new development. The company is already fighting the ‘Pegasus’ spyware issue which, according to many media reports, has resulted in a drop in the number of fresh downloads of the messaging app and a sharp increase in the downloading of rival Telegram app including in the Indian context.

The Facebook-owned company has been very keen on kicking off the payments app with 400 million active user base in the country. As of now a beta version is available with 1 million users.