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WhatsApp gives in to RBI's diktat on data localisation; Will Amazon, Google follow suit?

With the clock ticking down to the RBI's deadline for compliance with its data localisation norms, mobile messaging platform WhatsApp today announced that it has built a system that stores payments-related data in India.

twitter-logo BusinessToday.In        Last Updated: October 9, 2018  | 17:31 IST
WhatsApp gives in to RBI's diktat on data localisation; Will Amazon, Google follow suit?

With the clock ticking down to the RBI's deadline for compliance with its data localisation norms, mobile messaging platform WhatsApp today announced that it has built a system that stores payments-related data in India.

In April the apex bank had issued a circular directing global payment companies to store transaction data of Indian customers in the country itself within six months. The new norms come into effect from October 15. The idea was "to have unfettered access to all payment data for supervisory purposes".

"In response to India's payments data circular, we've built a system that stores payments-related data locally in India," WhatsApp spokesperson said in a statement, adding that the company hopes to expand the payments feature across India soon, so that it can "contribute to the country's financial inclusion goals".

WhatsApp began piloting its payments service in India earlier this year and claims almost one million people in the country are currently "testing" the feature. But the formal launch, which was expected to happen at the beginning of June, has been repeatedly pushed back pending regulatory approvals and the confusion on data protection laws. India is the largest market for WhatsApp, accounting for over 200 million of its total 1.3 billion user base.

The company's announcement comes at a time when most payment companies still have limited data storage in India and are struggling to comply with data localisation norms. While foreign players like Google, Amazon, Visa and MasterCard have raised objections on some of the clauses of the new rule, domestic e-payments companies like Paytm and Flipkart-backed PhonePe have come out in open support, accusing the former of trying to find ways to avoid taxes and scrutiny.

A senior government official told Mint that Internet major Google has finally agreed to toe the line. During a recent meeting between Google Chief Executive Officer Sundar Pichai and IT Minister Ravi Shankar Prasad at Google's headquarters in Mountain View, the company reportedly agreed to comply with all norms but sought time till the end of December to implement them.

The buzz is that several other companies have approached the RBI requesting permission to store a copy of the required data in India, instead of 100 per cent data localisation.

Finance Minister Arun Jaitley met RBI Deputy Governor BP Kanungo yesterday to discuss the data localisation norms for global financial technology companies. The meeting had been attended by Economic Affairs Secretary Subhash Chandra Garg, Financial Services Secretary Rajiv Kumar and IT Secretary Ajay Prakash Sawhney. So a clearer picture should emerge in the coming days.

WhatsApp latest move comes after months of being at loggerheads with the Modi government over fake news, message traceability, data localisation, and more. Last month, the company finally appointed Komal Lahiri as grievance officer for India, following a petition filed in the Supreme Court accusing it of not complying with Indian laws.

Given that the Justice Srikrishna Committee report on Personal Data Protection also restricts and imposes conditions on the cross-border transfer of personal data, chances are that more foreign companies will soon follow Google and WhatsApp's lead. The draft bill is currently open for public feedback. The government last month had extended the deadline for public comments till October 10 and the bill is likely to be presented in Parliament during the winter session (November-December).

With PTI inputs

Edited BY Sushmita Choudhury Agarwal

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