WhatsApp Pay roll out will be further delayed-Here's why

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Will the much-delayed roll out of WhatsApp Pay in India will further be pushed off? It is a question that has become inevitable after the Indian Supreme Court issued notices to the government, Reserve Bank of India, Google, Amazon, WhatsApp and Facebook, based on a petition that sought to disallow the tech majors from operating payment platforms using the Unified Payments Interface (UPI). 

The petition wants the tech majors to ensure security of user data and compliance with data localisation parameters.

Two similar petitions are already pending in the court against Facebook-owned WhatsApp’s proposed payment application. They have been filed by NGOs Good Governance and Centre for Accountability and Systemic Change. The new petition, by a Rajya Sabha member and Communist leader, also includes Amazon and Google in its ambit.

The allegation against tech giants

Referring to Google, Amazon and WhatsApp, the petitioner said that RBI and National Payments Corporation of India (NPCI) should ensure that the data collected by these entities for the purpose of facilitating payments is not shared with their parent companies or any other third parties.

The allegation is that, while the RBI and NPCI are obligated to protect the data of Indian citizens, these bodies are, on the contrary, compromising the interests of the people "by allowing the non-compliant foreign entities to operate its payment service in India."

Millions of Indians use UPI platforms for making payments and with the RBI and NPCI allowing the "Big Four Tech Giants" to participate in this UPI ecosystem without much scrutiny, sensitive financial data of the Indian citizens is at risk of being misused, the petition said.

"This at a time when India has banned a host of Chinese applications on the ground that these applications were or could be used for data theft," the petition claimed.

WhatsApp Pay roll out hit

The issuance of notice by the court to the companies and the government will doubtless hold back the prospect of WhatsApp Pay being launched in India any time soon. Facebook and WhatsApp Counsel did say if court entertains the petition, the process for grant of authorisation to WhatsApp for UPI services would come to a standstill.

Even without this case, there is still some conflict between the government and WhatsApp. The messaging platform is not ready to comply with the requests to reveal the source of messages. WhatsApp is holding its ground that it is not ready to break the sanctity of end-to-end encryption that it offers its users.

WhatsApp will need an all-clear from the Supreme Court before it can roll out its payment feature

WhatsApp Pay service, if and when it is offered in India, is expected to create a major splash in terms of digital transactions. WhastApp Pay aims to take on already established digital payment gateways in the country, mainly Google Pay, PhonePe and Paytm.

A damper to Jio Mart?

WhatsApp Pay beta-tested in India in 2018, and it amassed 1 million users. The beta was launched in February 2018 and offered P2P capabilities when users linked their accounts to a bank account. And it did go on to meet the RBI's data localization regulations prior to the October 15, 2018 deadline by providing domestic data storage. 

WhatsApp's parent Facebook bought a 9.9% stake in Reliance Jio for Rs 43,574 crore. The partnership between Facebook and Jio is unprecedented in many ways. Jio Platforms has an estimated user base of over 380 million across the country.  The social messaging app has more than 400 million users in India and more than 2 billion users worldwide. 

Jio is betting big on WhatsApp Pay to carry on its ambitious e-commerce forays through Jio Mart.