Whatsapp, owned by social media giant Facebook, may not be able to launch its long-awaited payment service until the Reserve Bank of India (RBI) gives it the go-ahead. WhatsApp has assured the Supreme Court that it will not roll out its payment services without complying with all the country's payment regulations and standards. Whatsapp Pay, the payments arm of the messaging platform, was due to launch at the end of May with an already established user base of around 1 million. This number is part of WhatsApp Pay's testing phase and will ultimately be available to its entire user base of over 400 million. The recent key in the launch of WhatsApp Pay came when the NGO called Good Governance Chambers filed a Public Interest Litigation (PIL) requesting a ban on WhatsApp Pay.
What makes WhatsApp Pay different?
The NGO, in its petition, alleged that Whatsapp violated the mandatory directives and regulatory standards of the Unified Payment Interface (UPI). On Wednesday, the Supreme Court agreed to hear public interest litigation seeking to ban WhatsApp Pay. The petition alleges that WhatsApp has "consistently failed" to comply with guidelines issued by the RBI and the National Payments Corporation of India. The petitioner has argued that the current Whatsapp Pay model is "high risk and very volatile" because two services are integrated into a single application and should not be allowed to deploy UPI payments. Another major drawback is that while other apps with the UPI payment feature have two levels of authentication, Whatsapp Pay does not have one, making it insecure for transactions.
"Neither safe nor safe"
In addition, the NGO emphasized that WhatsApp does not have a secure technological interface to protect users' confidential data. In short, regulatory standards such as those related to financial data security, data localization, two-factor authentication, and a complaints system are in violation according to the petition. The Supreme Court requested a response from WhatsApp, its parent company Facebook, RBI, the National Payments Corporation of India (NPCI) and the union government within three weeks. In the meantime, the government can deal with the claims made by WhatsApp, while WhatsApp has assured the Supreme Court that it will wait for the Reserve Bank of India, RBI, to give its consent before starting operations. However, the court clarified that "there will be no suspension of the proceedings regarding the application of WhatsApp payment by the government, which will be dealt with in accordance with the law." Meanwhile, The Times of India quoted the lead lawyer who appeared for WhatsApp as saying the company had met all the standards and hoped to get the green light before May 30 to enter the payments industry. Via Business Standard