The National Payments Corporation of India reported that instant messaging giant WhatsApp might soon be able to launch its payment service in the country. This comes as the company works towards complying with data localisation norms which the NPCI believes would be completed in about two months.
NPCI chief executive Dilip Asbe said in an interview that WhatsApp would still need at least two years to be able to benefit from its payments service in India as the economy is dominated by cash transactions. He added that the user base of the service should be over 300 million to have a substantial impact.
Facebook-owned WhatsApp has had the beta version of its payments service running in the country for a year now. The launch of its payments platform has already been delayed and hence is being keenly awaited by customers and other stakeholders.
There is a belief that WhatsApp payments service launch in India may be able to imitate the results of WeChat in China, post which the country would come closer to its cashless payments objectives.
WhatsApp has limited the users of its payments service to 1 million as of now. This is because the company has not yet completely complied with the data localisation norms set by RBI which require overseas firms to store and process user data within India and remove the same from foreign servers within 24 hours.
The NPCI chief executive said that a firm is currently auditing WhatsApp in order to measure the compliance of the firm with the norms. He said that after the audit is completed, a review will be conducted to decide how to move forward.
Asbe said that many other firms who are looking to launch their payments service in the country have not been able to do so due to the data localisation norms. These include companies like Amazon Pay, Truecaller and Xiaomi. He also informed reporters that he did not meet with the leadership team of WhatsApp.
According to a survey conducted by Niti Aayog, more than 75 per cent of the financial transactions are of under ₹100. Asbe said that this is where the unified payments interface (UPI) has to make its mark for which increasing the number of payment receipt points is a sound measure. The NPCI chief executive hoped that the use of UPI by firms like WhatsApp would help the country move towards more digital payments.
Asbe said that the number of digital payment platform users amount to only 100 million in the country. This has to be increased to at least 300 million to experience a material impact on the cash in circulation in the economy.
As of now, there are about 3 million point of sale machines working and 10 million QR codes in place. But Asbe believes that the figures should be five times as much each to reduce the cash usage in the country.
NPCI is currently also discussing the feasibility of operating UPI overseas to aid customers who travel abroad to make payments digitally.