WhatsApp UPI play appears to be in sort of trouble as it has caught up regulators attention over the issue of data sharing with parent entity Facebook and banking partner ICICI Bank.
The Reserve Bank of India (RBI) along with Ministry of Electronics and Information Technology, (MeitY) and National Payment Corporation (NPCI) were reportedly engaged in joint discussion over concern of WhatsApp sharing data.
Amidst Cambridge Analytica data leak and alleged manipulation in the US electoral process, the government of India has escalated scanner on global companies dealing in financial technology.
Citing sources, FactorDaily reports that Meity is opposing to sharing of payments information under any circumstances. The ministry also had raised the issue with the apex banking body (RBI). The report also adds that NPCI seems to be okay with the terms and conditions laid by WhatsApp for sharing data.
The instant messaging app declares that Facebook and ICICI can’t use data with a commercial motive.
To secure financial data of its citizen, the government of India has been emphasising that fintech companies must locate their servers in India. RBI had laid a set of guidelines for the foreign companies to set up their servers locally. The regulators will also ask WhatsApp to reside its server in India.
With having servers in the country, administration, as well as legal bodies, will have easy control over foreign companies dealing with financial and other crucial data. Companies including Paytm, Google and PayPal have agreed to setup their servers in India.
Meanwhile, WhatsApp has categorically mentioned that it’s a third-party service provider not a payment service provider (PSP). It also emphasised that it completely abides by NPCI guidelines on how data is captured and shared.
Currently, WhatsApp is testing UPI feature with a select number of users. While it was slated to open WhatsApp UPI for everyone by now, the mass launch is likely to be delayed owing to concerns from above agencies.
Of late, Paytm’s boss Vijay Shekhar Sharma launched a tirade against Facebook and WhatsApp over the security of citizens’ financial data. He also alleged that WhatsApp has arm-twisted regulation and guidelines before launching the UPI feature.