The beta testing of WhatsApp payment service which commenced from February this year is still on and this has its own security and privacy implications. Read on to know more about it…
In February this year WhatsApp, the instant messaging app owned by Facebook rolled out the payment service that integrated the digital payments feature based on Unified Payment Interface (UPI). Thus, began the beta testing phase of WhatsApp payment service to limited number of users. Even after 5 months of the beta testing phase of WhatsApp payment, it’s yet to formally launch the payment service in India.
The real reason for delaying the launch of WhatsApp payment is the fact that Facebook, the company that owns WhatsApp is yet to comply with the Reserve Bank of India (RBI) guidelines on data storage, processing of user data and data localisation. In April 2018, the RBI had directed all payment vendors to store all financial data related to Indians users in India. This directive of RBI had irked a lot of fintech firms, including major card networks and Facebook who had rolled out its beta version of WhatsApp payment earlier.
While local payment service providers like Paytm and other vendors complied with the RBI guidelines on the usage of user data and data localisation, a group of foreign firms, including card networks and Facebook, was trying to get the mandatory requirement of storing all copies of data in India relaxed. This is one of the key reason why National Payments Corporation of India (NCPI) which runs the UPI has not granted WhatsApp a full-scale operating licence for the payment services in India.
Privacy & Security Concerns
To ensure the privacy and security concerns of WhatsApp users and government of India, Facebook should dispel the fear of user privacy and data safety that arose after the involvement with Cambridge Analytica, in cases relating to data misuse. WhatsApp also needs to open itself to UPI conditions. WhatsApp payment in the beta version does not ask for log-in password, which is a huge security risk for consumers.
As a matter of fact, the two key reasons for WhatsApp not being given the go signal from various government bodies is the non-compliance relating to 2 factor authentication and data localisation.
Currently, WhatsApp is awaiting clarification from the Reserve Bank of India on data storage before it will a final call on data localisation. Only after this process, Facebook will be formally launching the services of WhatsApp Payments in India.