Two-and-a-half years after it first made the attempt to enter into India’s UPI market, WhatsApp finally got approval from the National Payments Corporation of India (NPCI) to go live on UPI. WhatsApp will now be able to extend Unified Payment Interface (UPI) payment services in a graded manner, starting with a maximum of to 20 million users. The last time WhatsApp divulged figures, it has said that it had 400 million active users in the country.
“National Payments Corporation of India (NPCI) has given approval for WhatsApp to ‘Go Live’ on UPI in the multi-bank model. WhatsApp can expand its UPI user base in a graded manner starting with a maximum registered user base of twenty (20) million in UPI,” a statement from NPCI said.
WhatsApp Pay was first announced in February 2018 as a trial run for select users (around a million) in partnership with ICICI Bank, but has been facing regulatory hurdles since then in its attempts for a full rollout.
At the time of the announcement, it also faced criticism from existing players such as Paytm. What followed was extensive discussions with the government and the Reserve Bank of India and nearly two years later, in February 2020, WhatsApp got the NPCI’s nod to launch WhatsApp Pay, where it received approval for an initial rollout of 10 million users.
Data compliance and localisation has been the main point of contention. Since that time, it has faced a case in the Supreme Court seeking to put a halt to its service, as well as an antitrust complaint (which was dismissed by the Competition Commission of India).
In August, the RBI told the Supreme Court that it had not granted permission to WhatsApp Pay to go live for full scale operations as it was concerned about WhatsApp storing some payment data elements outside India beyond the permitted timelines indicated in the circular and the Frequently Asked Questions on 'Storage of Payment System Data' issued by RBI on June 26, 2019."
This announcement also comes hours after the National Payments Corporation of India put in place a 30% volume cap for UPI payments. Any third party app provider or payment service provider that offers UPI payments cannot process 30% of the total volume of transactions processed in UPI during the past three months. This will be in effect from January 1, 2021. “It will help to address the risks and protect the UPI ecosystem as it further scales up,” the NPCI said in a statement.
Whichever currently existing player exceeds the specified cap will have a period of two years from January 2021 to comply with the same in a phased manner.