India: WhatsApp caves to local data storage demands

WhatsApp, Facebook’s messaging app that is trying to make inroads in the digital payments market in India, has created a system to store payment data locally in India.

Reuters, citing a statement from WhatsApp, reported the company confirmed it built the system in response to India’s payment data guidelines. India has required companies to store data locally on Indian consumers. According to Reuters, WhatsApp has a user base that is higher than 200 million in India, and has been trying to break into the payment market in the country.

While WhatsApp began testing payments in the country earlier this year with around one million users, it has delayed its formal launch partly due to a need for clarity on the part of Indian regulators as to how the data is supposed to be stored.

As the report noted, this comes as other companies have sought an extension of the October 15 deadline to ensure the data is local. Mastercard, Visa, PayPal, Google, Amazon, and Facebook have met with the Indian Finance Minister Arun Jaitley to get extensions.

The move to launch a payment app in India makes sense, given that Credit Suisse predicts it will be a US$1 trillion market by 2023, reported Quartz. WhatsApp has been slow in launching its payment app in the country because it first needed the nod from the government.

In June, Bloomberg reported that the Ministry of Electronics and Information Technology (MeitY) asked WhatsApp, along with partner banks, to provide additional details about the system. “We are working closely with the Indian government, NPCI [National Payments Corporation of India] and multiple banks, including our payment service providers, to expand the feature to more people,” WhatsApp Spokesperson Anne Yeh told Bloomberg. The delay comes as the central bank of India has recently made payment services use local servers for customer data.

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