WhatsApp builds system to comply with India's payments data storage norms

MUMBAI/NEW DELHI (Reuters) - WhatsApp has built a system to store payment-related data in India, in line with a central bank directive that all such data must only be stored locally, as the Facebook-owned messenger looks to deepen its offerings in its biggest market by users.

FILE PHOTO: The WhatsApp messaging application is seen on a phone screen August 3, 2017. REUTERS/Thomas White/File Photo

Facebook’s messaging firm, which has a user base of more than 200 million in India, has been trying to break into the country’s payments space. Its move to comply with storage norms could potentially threaten entrenched players such as SoftBank and Alibaba-backed Paytm.

Foreign payment companies were caught off guard in April by the Reserve Bank of India’s (RBI’s) one-page directive that said all payments data should, within six months, be stored only in the country for “unfettered supervisory access”.

“In response to India’s payments data circular, we’ve built a system that stores payments-related data locally in India,” WhatsApp said in an emailed statement.

The Menlo Park, Calif.-based firm began testing payments in India with 1 million users earlier this year.

But a formal roll out has been delayed amid false messages circulating on the platform that have led to mob lynchings and more government scrutiny, according to local media.

Reuters has previously reported that a lack of clarity about local data storage norms has also delayed a formal launch of WhatsApp’s inter-bank money transfer service.

Its compliance with data storage comes at a time when, according to sources, several other global payments firms are seeking extensions on the Oct. 15 data localization deadline.

Some are asking for data mirroring that would allow data storage overseas along with a copy in India, as this would be easier to comply with, multiple sources have told Reuters.

Mastercard, Visa, PayPal, Google, Amazon and Facebook met Indian Finance Minister Arun Jaitley last week to secure an extension of the deadline for local storage of payments data, a source said.

Google, PayPal and Facebook declined comment, while Mastercard, Visa and Amazon did not immediately respond to a request for comment. The RBI did not have an immediate comment.

Reporting by Sankalp Phartiyal and Aditi Shah; Editing by Euan Rocha and Himani Sarkar