Instant messaging giant WhatsApp may end up paying enormous price due to the ongoing snooping controversy. According to several media reports, the Reserve Bank of India has told the Supreme Court that the Facebook-owned platform is non-compliant with India’s data localization rules and has therefore directed NPCI to prevent WhatsApp from starting full-fledged payment services.
RBI’s response that was filed on November 6 in SC was in response to the petition filed by the Centre for Accountability and Systemic Change (CASC) earlier this year. CASC is an important think tank and RBI was one of the parties in this petition.
RBI has reportedly told the SC that WhatsApp is storing many critical payment data like transaction ID and expiry of collect request outside India (mainly in the U.S.) and therefore the platform is deemed as non-compliant with India’s data localization rules & regulations.
India’s top banking regulators reply to SC will certainty give a serious jolt to WhatsApp’s aspirations to start a full-fledged UPI payment services in India. The messaging giant has been desperately rearing to launch its payment services in India, which is its largest market with nearly 400 Mn subscribers across the country.
The Facebook owned platform had even launched the beta version of its payment services in February last year. Its beta version offered payment services to nearly 1Mn subscribers, according to the company.
Even though it is still too early to comment on WhatsApp’s chances of starting a payment service in India. But there is no denying that the ongoing Pegasus controversy has once again brought privacy concerns in the focus and this may not augur well for the messaging platform’s plan to start payment services in India.
The continuous hindrance in WhatsApp’s plan will lend a decisive advantage to incumbent players like Google Pay and PhonePe, who have already consolidated their place firmly in India’s rapidly UPI payment market.