WhatsApp has been running trials on its payments platform WhatsApp Payments in India for a while now and has notched up a sizeable base of users. But its attempt to obtain an official consent to formalize the payments business has not yielded any results so far and it may have to wait longer.
The Indian government wants WhatsApp to set up a physical office here with personnel in flesh and blood holding responsible positions. WhatsApp and Facebook have been controlling the operations remotely from outside the country.
It is learnt that WhatsApp tried to take the matter up with the government, as WhatsApp COO, Matt Idema met senior officials at India’s Ministry for Electronics and Information Technology (MeitY) in New Delhi some time back. This requirement from the government was conveyed to the COO during this meeting it appears.
The ministry wants to bring the Reserve Bank of India also into the loop and ask the banking regulator to convey its opinion on this issue of handling the payments business in India without any physical presence in the country.
WhatsApp has indicated that it does have plans to recruit personnel at the highest level; the positions of the head of Indian operations and one to head the policy division are being filled soon.
The government’s reluctance also stems from the fact that WhatsApp does not have a running model of their proposed payments business in any other country. The idea of handling payments where 220 million people could avail the service without an office, or personnel within the country, is beyond the comprehension of the Indian officialdom. The questions the officials have raised are not irrelevant. They want to know who would be held responsible if there is a dispute over payment; more importantly, it is pointed out that WhatsApp may just wash its hands of and leave it at the door of the banks.
Another pertinent issue raised by the ministry relates to the very agreement that WhatsApp has entered into, with the banks in India. It is mentioned that dispute resolution and data transfer will be handled outside India as per these agreements. These are causing the ministry worries and it would want RBI as well as the National Payments Corporation of India (NPCI) (since WhatsApp has chosen UPI to be its payments channel), to weigh in on all these issues and take a final call so that the application by WhatsApp Payments can be considered and approved.
It may be pertinent to recall that the ministry had raised a few more objections earlier with the WhatsApp Payments model. These were pertaining to the 2-stage authentication which was found missing, having its servers outside the country where the customers’ data would be stored. There are also fears that WhatsApp could share the data with its parent Facebook, which has come under a cloud on data privacy, of late.
All these could delay the entire process of rollout of the payment service on WhatsApp.