WhatsApp has assured the Supreme Court that it will not roll out its payment services without complying with all payment regulations and norms in the country.
Whatsapp Pay, the messaging platform’s payments arm, was expected to launch by the end of May with its already established user base of about 1 million. This number is part of Whatsapp Pay’s trial run phase and would be eventually made available to its entire user base of more than 400 million.
The recent spanner in the works of Whatsapp Pay launch came about when NGO called Good Governance Chambers filed a Public Interest Litigation (PIL) seeking a ban on WhatsApp Pay.
What makes Whatsapp Pay different?
The NGO, in its petition, has alleged that Whatsapp violates the mandatory guidelines and regulatory norms of the unified payment interface (UPI).
The Supreme Court on Wednesday agreed to hear the public interest litigation seeking a ban on WhatsApp Pay. The petition alleges that WhatsApp has ‘consistently defaulted’ in complying with the directives issued by the RBI and the National Payments Corporation of India.
The petitioner maintained that the present model of Whatsapp Pay is ‘at high risk and highly volatile’ because two services are embedded in a single app and should not be permitted to deploy UPI payments.
Another major shortcoming is that while other applications with UPI payments facility has two levels of authentication in place, Whatsapp Pay does not, rendering it insecure for transactions.
"Neither safe nor secure"
Moreover, the NGO pointed out that Whatsapp does not have a secure and safe technological interface for securing sensitive user data.
In a nutshell, regulatory norms such as those pertaining to securing financial data, data localization, two-factor authentication, and a system for lodging complaints are all in violation as per the petition.
The apex court has sought a reply from WhatsApp, its parent Facebook, RBI, National Payments Corporation of India (NPCI), and the union government within three weeks.
The government can process applications filed by WhatsApp in the interim, while Whatsapp has assured the Supreme Court that it will wait for the Reserve Bank of India, RBI to give its assent before commencing its operations.
However, the court has clarified that "there will be no stay of the proceedings with respect to the application of WhatsApp Payment by the Government which shall be processed in accordance with law."
Meanwhile, the Times of India has quoted the senior advocate appearing for WhatsApp as saying that the company has complied with all the norms and was hopeful of getting the nod by May 30 to enter the payment business
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Nitesh is a writer at Techradar india. He has spent 12 Years as Journalist, Content Writer, Editor with Newspapers and Magazine, English language, Email. Nitesh went to Nagpur University.