Plans for WhatsApp to launch its payments business in India are now on hold after the Reserve Bank of India (RBI) told the Supreme Court that the messaging platform is non-compliant with data localisation norms.
Banking regulator RBI said that it has examined reports and responses by the National Payments Corporation of India (NPCI) and “is of the considered view that WhatsApp is storing the following payment data elements outside India beyond the permitted timelines indicated in the circular and frequently asked questions (FAQs) on storage of payments system data issued by RBI on June 26, 2019”.
RBI has also directed the NCPI to not allow a full-scale launch of a payments business by WhatsApp, on the Unified Payments Interface (UPI) till they are fully compliant.
The latest development damages the company’s aspirations to have a payments play in India on the fast-growing UPI network. WhatsApp Pay has been restricted to 1 million users in beta-mode since February 2018.
In July, WhatsApp’s global head Will Cathcart had told the Times of India that the company was compliant with local laws and that he “couldn’t wait” to launch payments here as everything the company does is centred around India, its largest market with 400 million monthly active users.
The pause comes as market leader Paytm is investing heavily in a range of marketing initiatives to maintain that position.
This update comes as the parent company Facebook launched a catalogue feature for the messaging app, building out the service’s e-commerce tools as it moves slowly toward monetising the app it bought in 2014 for US$19 billion.
Small businesses, the main users of the free WhatsApp Business app, can now display a “mobile storefront” showcasing their wares with images and prices. The feature is available for users in Brazil, Germany, India, Indonesia, Mexico, Britain and the United States and will be rolled out around the world in the next few weeks
Sourced from The Times of India, Economic Times; additional content by WARC staff