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The messaging platform WhatsApp seems to have finally buckled under pressure and has set up a system to store payments related data in India. This is in compliance with Reserve Bank of India’s data localisation regulations.
The development comes six months after RBI’s circular (in April) that said all system providers will have to ensure that the entire data relating to payment systems operated by them are stored only in India. It had given time till October 15 to comply with the mandate.
“In response to India’s payments data circular, we’ve built a system that stores payments-related data locally in India,” a WhatsApp spokesperson said on Tuesday.
The company has been testing its WhatsApp Payment on UPI for the past few months. “In India, almost one-million people are testing WhatsApp payments to send money to each other in a simple and secure way,” the spokesperson said.
WhatsApp’s announcement has come a day after the Finance Minister Arun Jaitley met the RBI Governor BP Kanungo to discuss data localisation norms for the global fintech companies. The meeting was also attended by Economic Affairs Secretary Subhash Chandra Garg, Financial Services Secretary Rajiv Kumar and IT Secretary Ajay Prakash Sawhney.
WhatsApp further added that it soon hopes to ‘expand the feature’ across India so that the company could ‘contribute to the country’s financial inclusion goals’. The company has around 200 million users in India, out of the 1.3 billion users across the globe.
Not only WhatsApp, but also majority of the platforms such as Paytm, PhonePe, Google Pay and PayPal are aiming for maximum traction on their apps as India has the biggest potential in such financial mechanisms in future.
Mixed response
The recent data localisation mandate by RBI had drawn mixed response from the industry with domestic payment companies like Paytm and PhonePe welcoming the decision, while their global counterparts like Google (which offers Google Pay in India) have backed free flow of data.
Some of the international players also sought more time and asked that they be allowed to mirror the data. For instance, Google is learnt to have agreed to follow the RBI’s local data storage norm for payment services but wants time until December to comply with the rules.
Besides, majority of the international associations are believed to have recently drafted a joint letter flagging concerns with some of the proposed clauses of even the Personal Data Protection Bill, which too mandates local storage of certain types of data.
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