WhatsApp UPI unlikely to launch next week: MeitY demands more clarity on data storage policy

Ahead of launching its payment interface in India, WhatsApp has been facing hurdles from arch-rival and regulatory bodies over data sharing policy and security concerns. Now the Facebook-owned instant messaging platform is nearing to launch its UPI-powered payment option for more than 260 million customers in the country.

But the anticipated launch may get delayed as Ministry of Electronics and Information Technology (MeitY) has sent a fresh letter to NPCI seeking the details about the data storage policy of the company. In its letter, MeitY also asked that how user data will be shared with its parent company Facebook.

According to an ET report, the letter has also been sent to RBI.

The report further added that NPCI is the governing body for India’s unified payment interface (UPI), so the ministry has sought clarification from the payments corporation instead of WhatsApp and Facebook.

Two weeks ago, RBI, MeitY, and NPCI were reportedly engaged in joint discussion over concern of WhatsApp sharing data. However, NPCI was satisfied with the terms and conditions laid by WhatsApp for sharing data.

MeitY had raised questions over WhatsApp not following the two-factor authentication norms laid down by India’s central bank. NPCI had responded to MeitY’s first letter in April but the government body was not convinced with it.

Unlike PhonePe, BHIM, Google Tez and Paytm, WhatsApp doesn't ask to enter a PIN to initiate the application for payments. In the case of other UPI apps such as Google’s Tez, a PIN is required to access the app and also for making the final transaction.

WhatsApp, however, considers app installation on the phone as the first port of authentication called device binding.

Meanwhile, RBI diktat on setting up servers in the country for payments firms is also a major concern behind the delay in WhatsApp peer-to-peer payment service.

Adding more concerns over its data sharing policy, WhatsApp had revealed that it shares limited data with the parent company. The statement drew wrath from regulators as well as other payments firms who operate under the umbrella of NPCI.

This could be another temporary setback for the messaging app, which has partnered with HDFC Bank, ICICI Bank, Axis Bank and SBI as a necessary system to launch its full-fledged UPI operations In India.

The much-awaited payment interface is expected to follow China's WeChat--a social networking app that allows users to do everything from messaging, calling, shopping, payment, and host of other services on a single platform.