The Indian government has told WhatsApp that it cannot set up its payments service in India till the time it has an office and it recruits a team for the purpose. WhatsApp, a Facebook-owned instant messaging mobile service, has hit another hurdle in rolling out its integrated payment solution for its 200-million-plus users in India.
Responding to the development, an official at Whatsapp told that the company is looking to hire two senior profiles in India namely the Head of the policy and the Head in India, as setting up a team in India has become a priority for the company.
According to WhatsApp, the company’s top priority is to hire a local team on the ground. The ministry is concerned about who will be held responsible if a dispute in payments arises. “WhatsApp might simply say my commercial dealing is with a bank, they are using my app, and we are not in your jurisdiction at all,” said an official.
WhatsApp has been beta testing its Unified Payment Interface(UPI)-based payments service for several months now. Chief Executive Officer Mark Zuckerberg told investors in a recent meet that he sees a huge demand for WhatsApp payments in India. The government will also consult the Reserve Bank of India on whether payments solutions that are remotely controlled break any rules on the setting up of financial services in India. These hurdles have further delayed the launch of WhatsApp Payments in the country.
“People who have tested WhatsApp Payments, feedback and usage have been very strong. All signs point to a lot of people wanting to use this when the government gives us the green light,” said Zuckerberg in a call with investors after the company’s second quarter earnings. One of the biggest concerns that the Indian government has expressed with WhatsApp’s payment feature is how user data will be stored. The Ministry of Electronics and Information Technology (MeitY) had asked the company and its partners to furnish more details about the payment system.
The government’s stand on ensuring privacy and security comes after several players in the digital payments industry pointed to the alleged flouting of norms by WhatsApp to roll out its payments feature. Vijay Shekhar Sharma, founder and CEO of Paytm, among the loudest critics, even said that he was asked by the NPCI to delay the launch of UPI payments on Paytm to favour global giants Google and WhatsApp.