The National Payments Corporation of India (NPCI) has released a statement responding to the controversy surrounding the rollout of Whatsapp’s UPI based payments system. Referring to the launch as a “beta launch with limited user base of 1 million and low per transaction limit.”
Earlier this week WhatsApp began rolling out it’s UPI based payments feature in India. The feature has been made live on both Android and iOS. The rollout seems to be a phased one. However, anyone can get the service activated by simply receiving a message from someone who already has the feature.
The following launch controversy sprung up as incumbent payment services in India felt Whatsapp was playing by its own rules. Most vocal among them was the PayTM CEO, Vijay Shekhar Sharma. In an interview with CNBC Sharma said, “Whatsapp is killing India’s ‘beautiful, open UPI system’, and that it has gotten preferential access to UPI. He says that “it does not allow transactions to non-Whatsapp UPI handles, UPI handles created via other apps, does not include passwords and logins, and QR code scanning. Everyone else has 3 factors of authentication: login, password and then UPI pin. Whatsapp doesn’t have login and password.”
While Sharma made some prudent points, it was puzzling that he waited this long to point out issues that always existed with the UPI. Notably that it was a closed platform loaded in favour of banks (PayTM is a payments bank). Maybe the arrival of Whatsapp, which boasts over 200 million monthly active users in India, has shown the flaws of the preferential treatment system to the incumbents. Nikhil’s analysis goes into the details regarding these issues.
NPCI’s statement raises a few questions
What is even more perplexing is NPCI’s statement trying to clear the air on the issue. Let’s take a look at it bit by bit, excerpts from NPCI’s statement is in bold.
“Currently, NPCI has given its consent to roll out WhatsApp BHIM UPI beta launch with limited user base of 1 million and low per transaction limit.”
This is the first we are hearing of a “beta rollout” for any UPI application. While features have been added post-launch, the basic framework has been in place for launches by other players (Tez or PhonePe for example).
Secondly, calling a one million user rollout “beta” sounds a little silly and there is no explicit mention of the “low transaction limit” on the app.
“Four banks will join the multi-bank BHIM UPI model in phases (in the coming weeks) and full feature product shall be released after the beta test is successful.”
What does this have to do with Whatsapp? Other players have been able to run UPI transactions without the multi-bank model, why does Whatsapp’s ‘full feature product’ have to wait for this to rollout?
“Broad principles for interoperability like a) ability to send and receive money through any BHIM UPI ID b) intent and collect call and c) read and generate BHIM / Bharat QR code are required in final BHIM UPI app. BHIM UPI enabled app which fulfils such principles only will be permissible for full scale public launch.”
When exactly is the full-scale launch? Who decides when an app is feature complete and ready for a full launch? What stops an app from taking advantage of loopholes with an extended beta?