In accordance with a central bank directive which states that all payment- related data is required to be stored locally, the Facebook owned messenger, Whatsapp has built a system to store that data in India as the app looks to deepen its offerings for users in its biggest market.
Whatsapp has a very strong user base in India with over 200 million users and it has been trying to gain ground in the country’s payments space. It could become the biggest threat to players such as Alibaba- backed Paytm and SoftBank after its move to comply with the storage norms.
In order to ensure “unfettered supervisory access”, in April Reserve Bank of India introduced a one- page directive that required all payments data to be stored only in the country within six months catching foreign payment companies off guard.
California based firm, The Menlo Park had began testing with its 1 million Indian users earlier this year.
However, according to local media, misleading and false messages have been circulating on the platform that have caused mob lynchings and increased government scrutiny consequently delaying a formal roll out.
Whatsapp’s inter- bank money transfer services’ formal launch has been delaying since sometime now given the lack of clarity of the local data storage norms according to previous reports.
While whatsapp is working on its compliance with the storage norms, other global payment firms are trying to get an extension on the deadline for localization which has been set for October 15th this year. Major market players including Mastercard, Paypal, Amazon, Facebook and Google had a meeting last week with the Indian Finance Minister Arun Jaitley to discuss the same, according to a source. However, they denied for comments along with RBI.
In order to comply with multiple norms, some firms are asking for data mirroring so that data could be stored in India as well as a copy could be made available overseas.