WhatsApp sets up a system to store payments-related data in India

Facebook-owned messaging platform WhatsApp has built a system that stores payments-related data in India, in line with the Reserve Bank of India (RBI) mandate for data localisation.

A few financial services players, however, say that greater clarity of the norms is required and the deadline should be extended as it takes time to build data centres.

WhatsApp has been running a pilot project of its payments services in India for the past few months. The government had earlier told the company to comply with the localisation norms before getting a go-ahead for a full-fledged launch. In April, the RBI had asked all service providers to store financial data in India. They were given six months to comply with the mandate and the deadline will end on October 15.

“There will be more rounds of discussion between the regulator and the players in the next week, detailing what are the exact requirements till October 15, and what would be the consequences if the entities are not able to comply by October 16,” said a source.

Dilip Asbe, managing director and chief executive officer of National Payments Corporation of India (NPCI), said that as a system operator, it would comply with the regulation. “We are working with players who aren’t compliant to make them follow the mandate,” Asbe said.

The mandate for data localisation has divided the firms. While global payments firms are proposing free flow of data, local prov­iders, such as Paytm, are supporting mandatory localisation. Sources said companies, including Google, had sought more time and demanded that mirroring of data be allowed.   “In response to India’s payments data circular, we’ve built a system that stores payments-related data locally in India,” WhatsApp spokesperson said. The firm said almost 1 million in the country were testing WhatsApp payments services. 

However, some have complained that the policy lacks clarity. Rohan Mishra, director, public policy, Mastercard, said: “Mastercard is regulated in very few jurisdictions, and India is one of them. There is still a lack of clarity in the regulations and whether we are already compliant with these. Indian consumer data is stored in India. The debate is storage vs access.”

Mishra said while local storage was the requirement, it was yet to be understood what would be the contours. There is also confusion over the requirement for the data to be stored only in India. “If the reason is access, there are better ways to provide it. Mastercard only has 16-digit card number — this data is useless to the regulator unless combined with other personal data.” 

A senior executive of a top global payments player said the global firms were running short on time. “In order to comply with the RBI circular, the company would have to segregate the India business and create a complete new set of processes, which follow security and other norms.”

Chitti Babu, senior director and business head of Wirecard, admitted it was not easy to build a data centre in the country. “We need to not only comply with global standards but also with the Indian regulator. This takes time,” Babu said.

WhatsApp payments service, which pushes UPI-based transactions via chat messenger, had been at loggerheads with fintech exp­erts, who alleged that it was flouting National Payments Corpo­ration of India (NPCI) guidelines.

India is the largest market for WhatsApp, with the country accounting for over 200 million of its total 1.3-billion user base.