What’s Holding Back Mark Zuckerberg to Launch Whatsapp Pay in India

In recent times, messaging applications have become quite popular in India. Since the internet-enabled messaging applications slash time and money (for buying messaging plans from mobile network operators),   the count of messaging app users is increasing in the country. According to database company, Statista, the number of mobile phones messaging apps users in India has increased from 106.9 million in 2016 to 205.6 million in 2019. Further, it is estimated that mobile phone messaging apps users will rise to 230.5 million in 2020.

Amongst the prominent messaging apps in India, Whatsapp is one of the most widely used messaging applications. The US-based messaging company, after securing millions of users in India, is planning to foray in the UPI payment segment. In the last few years, many companies viz. Paytm, PhonePe and Google Pay are offering UPI payment services to the common masses in India. Demonetization and digitization are main drivers to accelerate UPI payment services in the economy.

WhatsApp Launching its Payment App, WhatsApp Pay

In the previous year, the Facebook-owned messaging application had proclaimed to launch its UPI-based payment app, WhatsApp Pay in India. However, the launch of WhatsApp Pay got stalled as the central bank, Reserve Bank of India did not permit the UPI payment companies to take payments data outside India for “unfettered supervisory access”.

As a result, the payment application could not launch in 2018 and kept running itself in beta mode for a year.

Earlier in June, the central bank explained the rules stating “foreign payment firms can process transactions made in India outside of the country but the related data should be brought back for local storage within 24 hours,” as reported by the daily news, Business Today. 

According to the cited report, in the previous week, Will Cathcart, Global Head of WhatsApp,  said that WhatsApp was all set to roll out its payments service in India this year and that it was now in full compliance with the data localization norms.

However, there is another hurdle that is stalling the launch of WhatsApp. 

Probing if WhatsApp Pay Complies with Data Localization Rules

Apart from RBI’s non-permittance to source data outside India, WhatsApp Pay had a fallback because of Centre For Accountability And Systemic Change’s action also.

In 2018, the Indian think-tank, Centre For Accountability And Systemic Change made a petition to the apex court that WhatsApp Pay ( a new initiative of WhatsApp) was not conforming with payment data localization rules, according to the cited media report.

At present, when the US-based messaging app, WhatsApp is planning to release its UPI payment application anew then the apex court has asked the federal bank, RBI to report if WhatsApp is complying with data localization rules or not.

With these regulations and allegations, it seems difficult for Zuckerberg-led, WhatsApp to sail the boat easily. Nonetheless, eyes are still on RBI’s report as it will decide the future of WhatsApp Pay.