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The Indian government is reportedly delaying Facebook-owned chat app WhatsApp from launching its payment service in India due to privacy concerns, according to Bloomberg, which cited people familiar with the matter.

The government — which is reportedly concerned about how users’ data will be stored — enlisted the Ministry of Electronics and Information Technology (MEITY) to ask WhatsApp and its partner banks to give more details about the payment system, and the National Payments Corporation of India has to confirm that WhatsApp is compliant with its requirements.

WhatsApp had been rolling out its services in phases. The firm has held several beta tests during the last few months, testing peer-to-peer (P2P) payments, QR code payments, and payments that leverage the Indian Unified Payments Interface (UPI), a government-based interface that allows customers to send and receive bank-based payments via smartphone, making it useful for P2P payments.

This delay comes during a time of rising competition and crowding in the Indian payments space. WhatsApp’s payment service has significant potential in India. The Indian payments market has been undergoing a shift to digital payments since the country demonetized and removed 86% of cash from circulation in 2016. WhatsApp counts 230 million users in India, making the country its largest global market and giving the firm a compelling advantage in the country, since it could save customers from the friction of having to download a new app and sign up for an account.

That could give the firm an opportunity to mimic the success that leading chat app WeChat had in China when it launched WeChat Pay, its mobile wallet: WeChat Pay is now encroaching on market leader Alipay's share.

This government interference could hinder WhatsApp’s momentum.Mobile payments have a lot of room for expansion: Only 14% of adults in India make payments weekly, and 6% do so daily, demonstrating a lot of room for innovation and new solutions. But the market is growing fast — users will grow from 32 million in 2016 to a projected 77.8 million this year — which is creating crowding.

Fast-growing players like Paytm and Google Tez, which added 7.5 million users in the first five weeks of launching, are continually moving on the opportunity to expand their shares. WhatsApp has potential to launch strongly in the market, since it has already reached 1 million users through its beta tests, highlighting its adoption potential upon full launch.

However, if WhatsApp can't resolve this delay soon, and ensure the security and privacy of its users' data, its potential to gain share of this massive market can be limited.