Will not go ahead with payment service without complying with all norms: WhatsApp Inc to SC

WhatsApp Inc told the Supreme Court Wednesday that it will not go ahead with the payment service scheme without complying with all the regulations that are in force in India.

WhatsApp Inc said this before a bench, headed by Chief Justice S A Bobde, which was hearing through video-conferencing a plea seeking directions to the National Payments Corporation of India (NPCI) and the RBI to ban the US-based firm's operations in the unified payment interface (UPI) ecosystem on its current model.

"Kapil Sibal, senior counsel appearing for Respondent No.3 - WhatsApp Inc, makes a statement on behalf of his client that they will not go ahead with the payments' scheme without complying with all the regulations in force," the bench, also comprising Justices Indu Malhotra and Hrishikesh Roy, noted in its order.

The apex court issued notices to the Centre, WhatsApp Inc and others asking them to file their responses on the plea.

"Issue notice returnable after three weeks," the bench said.

The plea, filed by Delhi-based think tank Good Governance Chambers, said that in February 2018 NPCI had accorded permission to WhatsApp Inc to provide its payment services under the UPI ecosystem.

The plea has alleged that WhatsApp Inc, for the purpose of providing payment service, has not launched a 'dedicated app' for UPI enabled transactions but has embedded its 'messaging app' with UPI enabled feature.

"Therefore the Respondent no. 3 (WhatsApp Inc) operates on a model wherein a social app has been bundled with the UPI enabled payment feature," the plea claimed, adding that this poses huge risk to the financial data of users.

It alleged that data sharing policy of WhatsApp Inc is "inconsistent and non-compliant" with the applicable laws and guidelines issued by the NPCI and Reserve Bank of India and therefore, it cannot be permitted to operate under the UPI system.

The plea has sought a direction to the NPCI to ensure a change of existing model of operations of WhatsApp Inc so that it is consistent with the scheme of UPI payment system.

It said that NPCI and RBI should be directed not to permit WhatsApp Inc to offer its UPI payment service through its messaging app and rather ensure its operation only through a separate dedicated app.

The plea has also sought directions for NPCI and RBI to run extensive user awareness campaign to educate them about data security and protect them against any online fraud.

The bench has tagged the plea with another pending petition in the apex court which has claimed that WhatsApp has not fully complied with RBI's circular which prescribed data localisation norms.

During the earlier hearing in the pending plea, WhatsApp had told the apex court that it is conducting a trial run of its payment service and will comply with the RBI norms on data localisation before launching the full service.