WhatsApp seems to have stirred up some trouble for itself, as regulators have had their attention caught by concerns of data sharing of WhatsApp with its parent company Facebook and its banking Partner ICICI Bank.
The Ministry of Electronics and Information Technology, (MeitY) and Reserve Bank of India (RBI) along with the National Payment Corporation (NPCI) have reportedly had a join discussion with WhatsApp to address the data sharing concerns. And this seems to be a direct impact of the recent Cambridge Analytica scandal which hit Facebook quite hard. And this seems to have put the Indian government on edge.
According to a report by FactorDaily, the Ministry as well as the RBI are opposing the integration of UPI features by WhatsApp. But NPCI, is not reluctant about the terms and conditions laid out by WhatsApp. WhatsApp on its part has declared that neither Facebook nor their banking partner ICICI Bank have access to their data and the data of the users.
The regulators have asked WhatsApp to set up servers in India to localize the data of the people. This is part of the effort from the government to make sure that fintech companies have the servers in its ambit to be able to better serve the purpose of security and finance of the country. Paytm, Google and PayPal are among the companies that have agreed to abide by the regulation of the government.
On this front WhatsApp has vehemently tried to establish itself as a third-party service provider and not a payment service provider (PSP) and that it abides by all the NPCI guidelines. While the WhatsApp UPI feature has only been launched in beta as a test, the full launch does not seem imminent in light of this conflict.