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Bleak future for messaging app WhatsApp’s payment feature in India


Messaging app WhatsApp hasn’t been fortunate to ride on India’s digital payment wave. The Facebook-owned that that rolled out a beta version of peer-to-peer (P2P) payments in India in February last year might not be able launch the payments feature in the country anytime soon as it continues to face regulatory hurdles on data localization and data privacy front.

The company, which allowed a select group of users in India to use the P2P payments feature, wasn’t able to roll out the feature full-fledged following data localization rules charted out by the banking regulator Reserve Bank of India (RBI). While WhatsApp managed to comply with all the data localization norms and awaiting an RBI approval, the banking regulator has said that the company cannot operate its payments feature in the country.

According to a report by the Times of India, the central bank has told the country’s Supreme Court (SC) that WhatsApp Pay (the name of the payment feature) cannot be deployed in India as it does not fully comply with India’s data localization norms and has directed the National Payments Corporation of India (NPCI), the umbrella body of all retail payments, not to allow integration of UPI (unified payment interface) with WhatsApp. The RBI was responding to a query by the top court with regards to the status of WhatsApp’s data localization compliance in the country, the report said.

The apex bank’s response to SC’s query also comes in at a time when WhatsApp is being questioned globally over a spyware attack. Social media giant Facebook had confirmed last month that over 1,400 WhatsApp users across 20 countries including Indian journalists and activists were targeted by Israeli company NSO through a sophisticated spyware called Pegasus to snoop on people around the world. Even as Facebook has sued NSO, the spyware attack puts a big question on WhatsApp’s data privacy and security issue, feel experts tracking

WhatsApp was among three other global players—Google, Amazon and Xiaomi, to have applied for launching UPI payments in the country. While Amazon and Google have already launched the feature, Xiaomi’s Mi Pay has also apparently has received a nod from the RBI and is likely to soon roll-out the service for P2P and businesses both, said a source.

Several players, including WhatsApp, have been eyeing the burgeoning UPI payments system that that was launched by government backed NPCI in 2016. In just three years UPI has over-taken other modes of digital payments such as credit and debit cards, net-banking, and mobile wallets to control over 50 per cent of the total market. Also, it is interesting to note that Google Pay, which launched last year, dominates the UPI segment with 61 per cent share followed by leading FinTech players –PhonePe and Paytm with  25 per cent and 6 per cent market share for the month of October, according to a data collated by payment gateway RazorPay.


The article has been updated with some minor changes. 

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