Facebook-owned WhatsApp has told the Supreme Court that it is now in full compliance with data localisation norms of the Reserve Bank of India (RBI) after the messaging applications’ payment business has been stuck in trial stage for over two years.
WhatsApp, which has over 400 million monthly active users in India, told the apex court in its response that it has now “localised five data elements” that were identified by the banking regulator and mandated them to store in India only.
WhatsApp’s response noted it spent “significant engineering time and effort” over the last seven months to comply with RBI guidelines. “An independent third-party auditor, certified by CERT-in (the government agency under the IT ministry), has confirmed that WhatsApp’s payments feature satisfies the data localisation requirements under the RBI circular and frequently asked questions (FAQs),” the Menlo Park-based company said.
This is the first time WhatsApp has submitted it is fully compliant with RBI laws officially at the apex court, days after it launched the payments service in Brazil. In India, its payments services have been in beta stage, or testing stage, for over two years now, owing to multiple factors, but data localisation remains the largest hurdle.
WhatsApp’s response comes when its parent firm Facebook, in April, invested $5.7 billion in Jio Platforms, where the messaging platform is a core part of a commerce initiative — JioMart.
Among the issues on storage of data elements previously flagged, the RBI had said when a customer raises a dispute, WhatsApp application (client) logs, query screenshots uploaded by a customer and consumer email messages are shared with the support team located in Hyderabad and the US, and are stored for a period of 90 days.
“Although the logs do not contain payment data as contented by the auditor, screenshots uploaded by customers and customer email messages may contain payment data,” the RBI had said. WhatsApp’s latest submission, responding to a Centre for Accountability and Systemic Change (CASC) petition, means it has made relevant changes required by the RBI.
Both the RBI and NPCI — which manages Unified Payments Interface (UPI) — have been a party in the ongoing matter. While WhatsApp has claimed 100% compliance in the court, it is now waiting for a green signal from NPCI to launch payments at full scale.
Sources have said WhatsApp’s launch, beyond the beta stage, would be gradual since its large user base getting access to UPI in one go may affect the network infrastructure of the payments network. UPI recorded 1.23 billion transactions in May, where 85% of the volumes were cornered by US-based firms like Google Pay, Walmart-owned PhonePe and Amazon Pay.
Source: The Economic Times