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| WhatsApp to follow RBI rules to store data in India: Report | | | New Delhi
After more than a year of struggling with regulatory compliances, Facebook-owned chat messaging app WhatsApp is now planning to comply with the data localisation guidelines of the Reserve Bank of India.
A media report citing a senior Facebook executive said that WhatsApp is now sorting some engineering work and then will follow the RBI guidelines which mandate for a payments company to store data in India.
In April 2018, the RBI had issued a circular asking all payment system operators in the country to store data – pertaining to their customers – within India. The move was geared towards ensuring that user details remain secure against privacy breaches. The payment system companies had been given six months to comply with the localisation norms.
While several players such as Paytm etc complied with the norms, WhatsApp with its payment system had been seeking approval to merely mirror or copy payments data within India, while also storing the same data in its overseas servers.
However, Indian regulators continued to push for full compliance for WhatsApp to be able to launch its WhatsApp Pay service beyond the beta stage. In June 2018, almost 1 Mn people were testing WhatsApp payments in India out of company’s over 200 Mn Indian users.
In August 2018, the central government had ruled that the company will not be allowed to launch its payment service WhatsApp Pay in India till it complies with the demand.
The latest development comes after RBI filed an affidavit to the Supreme Court, stating that WhatsApp had not complied with its data localisation norms. The RBI had also said it is exploring regulatory actions to expedite compliance of data localisation.
WhatsApp had earlier taken permission from the NPCI to tie up with banks to facilitate financial transactions via the Unified Payments Interface (UPI).
The ministry of electronics and IT (MeitY) had then written to the NPCI seeking a clarification on how WhatsApp Pay will abide by Indian laws on sharing of user data. The ministry further asked the NPCI to check that all compliances are in place before WhatsApp is allowed to scale up its services.
The controversy started for WhatsApp Pay with Vijay Shekhar Sharma, CEO of Paytm, accusing the Facebook-owned messaging service of trying to enter the nation’s digital payments market through unfair means by flouting NPCI rules on UPI and deliberately restricting the service to its own 200 Mn users.
Among the concerns raised by the Paytm founder was the fact that WhatsApp Pay’s trial service does not require a login session and Aadhaar-based payment. Sharma believed that a lack of a login made WhatsApp payments a security risk, akin to giving an “open ATM” to everyone.
A report by Credit Suisse showed that the Indian digital payment sector is expected to grow five-fold to reach $1 Tn by 2023. With last one year lost in compliances and regulatory hurdles, even if WhatsApp Pay gets final approval now, its entry comes during the election fever and a heavy scrutiny of social media by the election commission of India.
The post WhatsApp Will Now Comply With RBI Data Localisation Norms: Report appeared first on Inc42 Media. |
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