It is one less hurdle for WhatsApp Payments as it got the green flag from National Payments Corporation of India (NPCI) for preliminary launch. The payments regulator approved the beta testing of WhatsApp's UPI-based payment feature among a portion of its user base with a low transaction limit.
"Currently, the NPCI has given its consent to roll out WhatsApp BHIM UPI beta launch with limited user base of one million and low per transaction limit. Four banks will join the multi-bank BHIM UPI model in phases (in the coming weeks) and full feature product shall be released after the beta test is successful," NPCI said in a statement.
The NPCI - an umbrella organisation for all retail payments in India -- asserted that it follows "well-defined guidelines" for BHIM UPI services with the objective of making its platforms "inter-operable and based on open standards, convenient and secure". The principles for inter-operability include ability to send and receive money through any BHIM UPI ID, intent and collect call and, read and generate BHIM/Bharat QR code that are required in final BHIM UPI app.
"BHIM UPI-enabled app fulfils such principles only will be permissible for full scale public launch," it emphasised.
WhatsApp Payments service is expected to disrupt the digital transaction scenario in India, which has been booming since demonetisation in 2016. The ripples are expected to rock the boat even for e-commerce leader Paytm on account of the reach the messaging application has.
"We welcome this statement by NPCI. It addresses the concerns of interoperability violation that we had raised. It also clarifies that the trial has been restricted to 1 million users, though we feel that a product with the stated violations could have been tried out amongst a much smaller base. We are still concerned that this statement is silent on the critical issue of safety/security of a financial transaction through UPI, where consumers need to mandatorily sign-in with username and password. This violation is fundamental and very serious," a Paytm spokesperson said in response to the NPCI approval.
"WhatsApp must implement login & password like all other BHIM UPI apps. This statement is also silent on other issues such as the requirement to send SMS notifications for every UPI transaction. We hope that future rollout will be fully compliant with all the guidelines. We wait to hear NPCI views on some of these missing aspects," the spokesperson further said.
Paytm founder Vijay Shekhar Sharma had been openly critical of the Facebook-owned company and its payment service, and has even alleged that the US firm was getting unfair advantage.
Sharma had raised a storm after Facebook-owned WhatsApp started testing payments through its platform. He alleged that WhatsApp's UPI payment platform has security risks for consumers and is not in compliance with the guidelines.
Alleging Facebook of having "arm-twisted" UPI to derive benefits, Sharma had said Facebook was "killing beautiful open UPI system with its custom close garden implementation."