Following the diktat of Reserve Bank of India (RBI), WhatsApp is setting up servers to store financial data in the country. The apex banking body has given a deadline of 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,” said a WhatsApp spokesperson.
WhatsApp has been under the fire from Indian regulators for reasons ranging from inability to curb fake news menace, circumvention around policy for its payments business and storing users data in local servers.
The instant messaging app had recently hired Komal Lahiri as local grievance officer after receiving flak from Supreme Court. It also laid out process to report concerns and flag objectionable content and fake news.
To ensure the safety and security of the payment system, the Reserve Bank of India (RBI) has asked all-digital payment providers to ensure data related to payment system be stored inside the country within six months.
Meanwhile, US-based payment firms including MasterCard, Visa, Google, and Facebook were expressing concerns including huge investments required for having data storage capability locally and the short deadline to meet the compliance.
Currently, WhatsApp Pay is in beta and being tested by about 1 million users. It’s likely to be launched for masses after setting up local servers to store financial data locally.
Indian digital payments major including Paytm and PhonePe have been lambasting Facebook, Google, and other foreign companies for expressing reluctance in setting up local data servers.
Since WhatsApp is setting up local servers in the country, it’s expected to get a nod for mass launch from regulators including RBI, Meity, and NPCI soon.
The Facebook-owned company is also hiring head for leading its payment business in India. Former Paytm and Tokopedia executive, Amit Lakhotia is one of the candidates for leading WhatsApp Pay in the country.
The development was first reported by Mint.