WhatsApp To Establish Data Storage Facilities In India For Payments

As reported by two knowledgeable people, the data storage facilities of WhatsApp has been set up in India for the company’s payments business plan, which prepares for the messaging application of Facebook to launch the digital paying services successfully. This project marks a significant event. The banking regulatory of the country has made a strong demand in which global payment businesses are required to store the transaction data related to Indian customers locally.

It is expected that WhatsApp will cooperate with the service based on the Unified Payments Interface along with ICIC Bank. An individual cited above said that services offered via State Bank of India, Axis Bank, and HDFC Bank will probably follow.

The Indian Reserve Bank asks digital payment businesses to complete data localization in India first, then submit a report to the central branch in the audit process. Only the auditors, who are impaneled with CERT-IN – the Computer Emergency Response Team in India, are allowed to conduct the audit.

According to WhatsApp, there is nothing new about this matter that needs to be commented on. Besides, ICIC Bank didn’t respond to the queries of ET on this matter, and the Indian National Payment Council refused to give any comment.

Over the last year, the payment service of WhatsApp was launched in the role of a pilot project. However, the service has been involved in several regulatory issues, including the demand for data storage to be localized, privacy issues related to Facebook – the parent company and finally, the charges for spreading fake news and misinformation on the messaging app.

In the last February, WhatsApp had endeavored to launch the payments service in cooperation with ICIC Bank, however, the company was forced to restrict the feature to a beta version.

A person informed ET of the development:

It should be further clarified that it is necessary for all data of domestic payments managed out of India to be brought locally in 24 hours then stored within the country, according to a note by The Reserve Bank of India.

Amazon – the internet retail giant followed to the guidelines of data localization earlier this year. It then went live with the payment service based on UPI in cooperation with Axis Bank.

As reported in the newest data of NPCI, 39 third-party applications including Ola Cabs, Uber, Amazon, and Google Pay are getting access to UPI as a platform. This May, it was reported that about 733.5 million data transactions, valued at Rs 1.5 lakh crore, were conducted through UPI.

There has been an intense competition taking place between UPI and other players such as Paytm, Google Pay and PhonePe.