NPCI confirms WhatsApp Pay's data localisation

(This story originally appeared in on Jul 29, 2020)

A filing by the Reserve Bank of India (RBI) with the Supreme Court shows that the National Payments Corporation of India (NPCI) has told the banking regulator that Facebook-owned messaging application WhatsApp is now fully compliant with data-localisation norms.

In a letter dated June 5, NPCI, which manages the Unified Payments Interface (UPI), told the regulator that it “confirms” WhatsApp has now satisfied data-localisation norms for payments service. This is the first time the umbrella payments body has confirmed WhatsApp Pay‘s compliance status formally. TOI has reviewed the filing.

“NPCI has reviewed the ‘Post-Change Review Report III’ certified by the independent third-party CERT-In empanelled auditor of WhatsApp – Deloitte. We submit herewith that we derive comfort from the reports submitted by Deloitte with regards to WhatsApp’s full compliance in the remaining three points on data storage guidelines issued by our office and accordingly complies with all five points in lines with requirements advised through your (RBI) letter dated November 1, 2019,” part of the letter to the RBI said.

As reported by TOI, Deloitte was appointed by WhatsApp to audit its compliance after NPCI had asked it to make certain changes referred to earlier.

Interestingly, the RBI is yet to specify when it will give the much-awaited final nod for WhatsApp to launch payments beyond the current trial-stage, which is restricted to 1 million users for two years. It has 400 million monthly active users. RBI’s response – which is part of proceedings after think-tank CASC challenged WhatsApp’s data compliance status – added that the apex court, thus, should dismiss the petition.

“It’s clear NPCI has said they (WhatsApp) have complied with changes they were asked to make. Government’s nod is critical too,” a person aware of the matter said. The source was indicating the conflict of the messaging platform, with 2 billion users globally, resisting government requests to disclose the source of messages to curb rumours and hate speech. This would mean end-to-end encryption would be broken, which WhatsApp has been against and says only people who are messaging each other can read the conversations.

Emails sent to the RBI, NPCI and WhatsApp India did not elicit any response on the matter.

Last week, WhatsApp India head Abhijit Bose said it can bring at least 200 million of its users to UPI, which is seeing steady growth in digital payments amid the pandemic. UPI is dominated by Google Pay, Walmart-backed PhonePe, Alibaba and SoftBank-backed Paytm along with Amazon Pay. Bose also outlined plans to start multiple pilots in areas like digital lending, micro-insurance and micro-pension in 18 months.

In June, Brazil suspended WhatsApp’s payments service to “preserve competitive environment” just after a week of its launch. WhatsApp, then, had said it remains committed to India and is working with local banks and regulators to launch payments services here.

NPCI confirms WhatsApp Pay's data localisation NPCI confirms WhatsApp Pay's data localisation Reviewed by TechCO on 7/30/2020 Rating: 5

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