WhatsApp Pay in flux as government asks the service to set up office in India

WhatsApp Pay, which has been mired in controversy since it started testing in India, is facing yet another hurdle. This time around, the government has told company officials they can’t launch the payments service unless they set up office in India.

Sources told YourStory that the Asia Pacific Head of WhatsApp was set to meet officials at the Ministry of Electronics and Information Technology (MeitY) last week. Media reports suggest the government is also looking to seek the Reserve Bank of India’s views on the payment service.

Another source said WhatsApp, over the last few months, has complied with the conditions suggested by NPCI for its launch, and the matter now lies with the government.

In another development, WhatsApp Pay updated its privacy policy for the payment service in India. Apart from ICICI Bank, it added HDFC Bank and Axis Bank to its Privacy Service Terms. It is also removed the term ‘beta product’ from its privacy policy.

The source quoted above said the service still has to get approvals from the government before it starts the offering for all customers. The addition of the three banks means WhatsApp Pay will run with a multi-bank partnership model on UPI.

In September last year, the NPCI released Circular 32, which talks about the multiple bank model. NPCI said: “The multi-bank PSP model allows a large merchant/tech player (referred to as third-party app provider), having access to a large customer base, to connect to the UPI system through multiple PSP banks. In the multi-bank API arrangement, the NPCI shall provide the NPCI Common Library directly for integration to the third-party app provider on behalf of PSP banks.”

NPCI released the model for mass players like Google and WhatsApp because it suspected large volumes from such players. This would save them from a stand-still in case the payment network of a particular bank was down.

Recently, YourStory reported third-party apps connected to the Unified Payments Interface (UPI) through multiple PSP banks need to reach a minimum volume of 5 million transactions worth Rs 500 crore a month within 12 months of going live with the payment infrastructure.