WhatsApp to employ third-party to audit its payments system in India

Facebook-owned messaging app WhatsApp will audit its payments system for data-localisation compliance through third party company.

WhatsApp has, in a response to the Supreme Court over RBI's affidavit on the matter, said that it has submitted a confidential revised data-localisation plan’ to all stakeholders.

The instant messaging app plans to launch the full-release version of its payments service only after it has stored the requisite payments data in compliance with the RBI circular and after the appropriate approval is obtained, TOI report quoted WhatsApp response to the apex court.

However, the company did not name the auditor.

As per an NPCI's official, the messaging app has not set a timeline to be fully compliant with data localisation norms set by the RBI.

At present, WhatsApp has been partially following data localisation plan through data mirroring, which involves storing data overseas, but creating copies on other servers.

Earlier, Facebook founder Mark Zuckerberg’s had written against data localisation. He said it will make them more vulnerable to unwarranted access.

In February last year, the messaging app had launched Whatsapp Pay service in beta mode. It has currently has restricted user base up to only 1 million. It plans to extend it to 200 million users.

Meanwhile, local players in the segment have complained that Whatsapp should not get an undue advantage of serving 1 million users in a beta stage without complying with all the norms.

Paytm founder Vijay Shekhar Sharma had lambasted Facebook and WhatsApp for its alleged circumvention of regulations while launching UPI-enabled payment feature. He termed the world’s largest social network ‘the evilest company in the world’.

WhatsApp’s payment, which uses the Unified Payments Interface (UPI), competes with Google Pay, BHIM, Paytm and PhonePe.

In April last year, the central bank had made clear that the data of the users shall only be stored in India. These payment companies had requested to remove the word “only” but RBI did not recede to this demand.