In an earnings call with investors, Mark Zuckerberg said that Facebook won’t store sensitive data in countries where it might be improperly accessed because of weak rule of law or governments that can forcibly get access to your data. He reiterated his stance against data localization, without mentioning any country specifically. Its worth noting this in the context for the RBI’s mandate for localisation of all payments data. “More countries following the approach of authoritarian regimes adopting strict data localization policies where governments can more easily access people’s data, and I’m highly concerned about that future.”
“Our stance on data localization is a risk. That is, if we get blocked in a major country, that will hurt our community and our business. But our principles on data localization aren’t new and this has always been a risk.”
It’s worth noting that WhatsApp’s payments launch has been held back because of the RBI’s 2018 localisation mandate directing that all payments data be stored in India; now WhatsApp is trying to comply with RBI’s directive.
Nikhil adds: Note that the RBI’s localisation mandate is to perform a supervisory function over transactions. However, all transactions linkages through Whatsapp, Google Pay, Paytm, PhonePe or even BHIM take place through the UPI, and the NPCI, which runs UPI has access to the same payments information that Whatsapp has access to. So, for a supervisory function, the RBI can gain access to that data via NPCI. What’s the need for Whatsapp to localise information here?
…RBI doesn’t need Whatsapp to localise to get access to data. Then what’s this demand for localising UPI data about? In order to delay Whatsapp’s rollout? Who benefits from that delay?https://t.co/DJb7BlRsgy
— Nikhil Pahwa (@nixxin) April 9, 2019
Days before the RBI’s directive came into effect, WhatsApp said it had built a system to store payments data in India. In March, the RBI told the Supreme Court in an affidavit that WhatsApp was yet to comply with the localisation directive.
On the call, Facebook also laid out its plan for WhatsApp in terms of payments and monetization:
1. WhatsApp has ‘cannibalized’ public platforms Facebook and Instagram in India: Addressing the question of whether Facebook’s new privacy-focused shift will mean that private apps will replace the more public ones, Zuckerberg said both public and private apps need to co-exist, although in India, WhatsApp has ‘cannibalized’ more public platforms; the broader pattern across the world, he said, people want to use both private and public platforms. WhatsApp has an estimated 300 million MAUs in India; Facebook does not provide country-wise users data although daily user growth this quarter was driven by India, Philippines, and Indonesia.
2. Payments and commerce on WhatsApp (and Messenger): Zuckerberg refused to give a timeframe on payments launch in India or other countries, although he is optimistic about on payments and commerce in messaging services. For context, WhatsApp Payments has been running in pilot in India since February 2018 with a million users. According to him, a private space in messaging is ideal for private business transactions: “Through messaging specifically, I’m more optimistic because of the private nature of this space, right? When you’re using a messaging service, you know that everything there is very intimate and private so it feels like a more natural space to be interacting with a business in a private way for doing transactions.” Zuckerberg says the goal would be for discovery to happen on more public platforms like Facebook and Instagram, while the follow ups and transactions can happen on Messenger and WhatsApp. “For businesses I think that this is going to help complete the loop and help them to actually sell more things which ultimately is what they care about when they’re using the platform”. WhatsApp Business has been live in India since January 2018.
3. Monetization of messaging services WhatsApp and Messenger on the backburner: Facebook said it has deprioritized monetization in messaging ‘at least in the near term’, and has prioritized privacy and interoperability for both messaging services – WhatsApp and Messenger. “So I think long term, we’re focused on building that fundamental business to consumer ecosystem. But short term, less focused on the revenue opportunities on Messenger and WhatsApp.”
Also read, from July: Concerns over user data and ‘other issues’ delay WhatsApp Pay rollout