Amidst the Israeli spyware hacking incident, Reserve Bank of India had told the Supreme Court of India that the private messaging platform, WhatsApp cannot carry out its payment business in India because it is non-compliant with data localization. It has also instructed the National Payments Corporation of India (NPCI) to not allow a full-scale launch of the payments service in India on the Unified Payments Interface (UPI).
India is the biggest market for WhatsApp and based on it, the Facebook-owned company was going to launch its payments app which is already on its beta version in India since 2017.
WhatsApp is managed by the UPI along with the other online payment platforms like PhonePe, Google Pay, Amazon Pay and Paytm. Under the surveillance of UPI, WhatsApp was rolling out its payments app among 1 million users before its official launch in India.
Supreme Court had asked RBI to update it on WhatsApp’s data localization status in August. In response to that, RBI had presented its report to SC on November 1st and asked to stop the release of WhatsApp Payments App for the time being. This is certainly a backlash to the full-scale payment business plan made by WhatsApp.
As RBI states at a prestigious news platform:
The RBI has examined the said reports (by NPCI) and the responses of NPCI and is of the considered view that WhatsApp is storing the following payment data elements outside India beyond the permitted timelines indicated in the circular and frequently asked questions (FAQs) on storage of payments system data issued by RBI on June 26, 2019.
According to the RBI's report, WhatsApp even stores various payment data outside India, including transaction ID, expiry of collect request, and retrieval reference numbers, among other data elements within its storage.
If this information accidentally gets leaked in public, it will not only harm people but also put the national security at stake. Even Minister Ravi Shankar Prasad thinks that data plays a crucial role in the digital economy discourse. According to him, in India, privacy is a much serious matter and the privacy and security of the consumer data must also not be ignored by anybody. Therefore, the matter should be given much importance before the launch of the WhatsApp Payments App.