[ By Bobby Anthony ]The Reserve Bank of India (RBI) as well as the National Payments Corporation of India (NPCI) have granted a license to WhatsApp, to roll out its WhatsApp Pay digital payment service in India, in a phased manner.The development has come after WhatsApp assured regulators that it is compliant with India’s data localization norms, which had emerged as a point of...
The Reserve Bank of India (RBI) as well as the National Payments Corporation of India (NPCI) have granted a license to WhatsApp, to roll out its WhatsApp Pay digital payment service in India, in a phased manner.
The development has come after WhatsApp assured regulators that it is compliant with India’s data localization norms, which had emerged as a point of disagreement that delayed the launch of the payment service.
It may be recalled that in 2019, the RBI had reportedly blocked a full-fledged launch of the service citing WhatsApp’s non-compliance Indian data localization norms. RBI's data localization norms require foreign companies to store transaction and user data inside India and delete the data from servers in foreign countries within 24 hours.
The RBI had also told the Supreme Court that WhatsApp, which is owned by Facebook, is non-compliant with data localization norms and that it has written to the NCPI on November 1, 2019, not to allow a full-scale launch of its digital payment service on the Unified Payments Interface (UPI).
The matter had reached the court, after the Centre for Accountability and Systemic Change (CASC), a think-tank, filed a petition in the Supreme Court challenging WhatsApp’s compliance standards and the absence of a local grievance officer in India, to which RBI was also made a party.
The RBI had stated that WhatsApp had been storing payment data elements outside India which include transaction ID, expiry of collect request, and retrieval reference number among other such data elements, beyond the permitted timelines indicated in an RBI circular on storage of payments system data issued by RBI on June 26, 2019.
“When a customer raises a dispute, WhatsApp application (client) logs, query screenshots uploaded by a customer, and consumer email message are shared with the support team located in Hyderabad and USA and are stored for a period of 90 days. Although the logs do not contain payment data as contended by auditor, screenshots uploaded by customers and customer email message may contain payment data,” the RBI had told the Supreme Court.
Accordingly, the RBI had written to the NPCI not to permit WhatsApp to go live for full-scale operations on UPI payments system, until it complied with Indian data localization norms.