WhatsApp Payments Under Govt. Scanner; NPCI Asked To Clarify Privacy Issues!

We had reported yesterday that WhatsApp Payment is about to be launched, triggering a new revolution in the digital payment sector in India.

Barely 24 hours of that news, fresh insights are coming in from Govt. sources regarding WhatsApp payment; and going by the looks of it, not everything seems smooth.

WhatsApp Payments is again under Govt. scanner, and it seems that WhatsApp and NPCI, both need to give a lot of answers.

Govt. To NPCI: We Need Answers!

Govt. of India has once again sought replies from National Payments Corporation of India (NPCI) regarding their approval of WhatsApp Payments.

The Ministry of Electronics and IT or MeitY has shot a second letter to NPCI, seeking clarifications on WhatsApp payments, and some major issues related to it.

If we go back a bit, then controversy around Whatsapp payment has been raging on, since long.

In April this year, allegations surfaced that WhatsApp will share user details with Facebook; and in February, Paytm founder Vijay Shekhar Sharma alleged that NPCI is being partial with WhatsApp, as major norms are being relaxed.

MeitY had questioned NPCI on these allegations, and NPCI had replied back as well.

But it seems that the response was not adequate, and this why a second letter has been sent to NPCI, questioning their approval for WhatsApp payment.

One of the officials said,

“The department was not very convinced with the response from NPCI, so it has (again) asked explicit questions,”

WhatsApp Payments In India: The Major Questions

Mainly, there are two issues which are stopping WhatsApp Payments’ pan-India rollout:

Data Sharing

Govt. of India wants to know where WhatsApp will store its payment related data, and whether any third party will have access to the data or not.

An official from IT Ministry said,

“We are asking them to respond more clearly on how they will ensure that adequate measures are taken to store data in India,

NPCI had earlier responded that some data sets would be stored in India and some outside. Now, Govt. wants more clarification.

 

2-Factor Authentication

 

As alleged by Paytm founder Vijay Shekhar Sharma, all UPI powered apps are being mandated to have 2-factor authentication, but NPCI has allowed Whatsapp to test their payments using one-step authentication only.

As per some officials, in their reply to Govt., NPCI has claimed that Whatsapp ‘considers app installation on the phone as the first port of authentication called device binding.’

Again, this is a violation of rules as put forth by NPCI for all UPI based payment platforms.

In their reply, Whatsapp said,

“We are not commenting on payments since we are still beta testing.”

We will keep you updated, as we receive more input on this development.