The launch of WhatsApp Payments has reportedly been delayed as parent company Facebook battles concerns over privacy with regard to how users data will be stored and shared. According to an Economic Times report The payment service was expected to be rolled out to all users by this week but was delayed over concerns over Facebook compliance with data privacy and the RBI’s mandate on data storage.
“Payments data is used to enable transactions, protect people from abuse and fraud, and offer customer support. The data is stored securely, and sensitive user data such as the last six digits of a debit card and UPI PIN are not stored at all,” a WhatsApp spokesperson told ET.
Sources said WhatsApp is still evaluating the RBI norms on data localisation, according to the report. Another bone of contention mentioned in the ET report is Google’s Tez and Flipkart’s PhonePe use of a screen-lock that is separate from the UPI PIN, this is something that WhatsApp doesn’t have. But NPCI’s UPI norms don’t mandate an additional layer of security like a screen lock, so it is unlikely that this is a critical holdup. Questions have been raised over WhatsApp data storage norms as well.
“The RBI mandate clearly says that financial data will have to be stored within the country. But for players like WhatsApp or Google, the information they might have on their users — like profile details and others — will not classify as financial information; the RBI can only regulate financial metrics,” said a source quoted in the report.
WhatsApp vs the rest
Following the pilot launch in February, incumbent payment services in India felt Whatsapp was playing by its own rules, as Medianama has earlier reported. Most vocals 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.”
WhatsApp has since remedied some of these concerns by adding support for BharatQR and interoperability with other UPI apps. With a 200 million plus monthly active user base, the entry of WhatsApp into payments is expected to disrupt the current payments market. However, as Medianama mentioned in its monthly UPI transactions report, the battle for supremacy in the space is between Google’s Tez and the Flipkart owned PhonePe with the NCPI’s BHIM a distant third.
Three banks have completed integration with three banks — HDFC Bank, ICICI Bank and Axis Bank. SBI is expected to complete integration after a formal launch.