WhatsApp Payments hits new hurdle; govt asks co to set up office in India

Responding to the development, WhatsApp said that the company is looking to hire two senior profiles, as setting up a team in India has become a priority for the company

WhatsApp, a Facebook-owned instant messaging mobile service, has hit another hurdle in rolling out its integrated payment solution for its 200-million-plus users in India. Apparently, the government has informed the company that it cannot roll out the payment services until the company set up an office and have a team in India, according to a news report in the Economic Times.
 
Responding to the development, WhatsApp told the Economic times that the company is looking to hire two senior profiles – India Head and Head of Policy – as setting up a team in India has become a priority for the company.
 
WhatsApp has been beta testing its Unified Payment Interface (UPI)-based payments service for several months now. Chief Executive Officer Mark Zuckerberg told investors in a recent meet that he sees a huge demand for WhatsApp payments in India.
 
“...of the people who have tested this (WhatsApp Payments), feedback and usage have been very strong. All signs point to a lot of people wanting to use this when the government gives us the green light,” said Zuckerberg in a call with investors after the company’s second quarter earnings on July 25.

 
One of the biggest concerns that the Indian government has expressed with WhatsApp’s payment feature is how user data will be stored. The Ministry of Electronics and Information Technology (MeitY) had asked the company and its partners to furnish more details about the payment system.
 
The government’s stand on ensuring privacy and security comes after several players in the digital payments industry pointed to the alleged flouting of norms by WhatsApp to roll out its payments feature. Vijay Shekhar Sharma, founder and CEO of Paytm, among the loudest critics, even said that he was asked by the NPCI to delay the launch of UPI payments on Paytm to favour global giants Google and WhatsApp.

 
The Ministry of Electronics and IT had asked National Payments Corporation of India (NPCI) to check if WhatsApp's payments service conforms to the RBI rules and data security of customers. NPCI was also asked to check that all compliances are in place before the US-based messaging app is allowed to scale up its services.
 
WhatsApp, on its part, has stated that sensitive user data such as the last 6 digits of a debit card and UPI PIN is not stored at all. While it admitted to using the infrastructure of Facebook for the service, it had asserted that the parent firm does not use payment information for commercial purpose.
 
The recent draft Data Protection Bill, submitted to the government by the Justice Srikrishna panel, could also have an impact on WhatsApp's plan.

 
The draft bill says that every data fiduciary shall ensure the storage of at least one serving copy of personal data on a server or data centre located in India.
 
Also, the government will notify categories of personal data as "critical personal data" that can only be processed in a server/data centre within India.
 
The panel's report and the draft data protection bill will now go through the cycle of inter-ministerial consultations, Cabinet approval and finally Parliamentary nod.