WhatsApp is all set to roll out its payments feature to 200 million Indians next week. Before the official rollout, the ministry of electronics and information technology, MeitY has asked the National Payment Corporation of India (NPCI) to check whether WhatsApp's Payments service meets the Reserve Bank of India's rules and regulations. MeitY has also asked NPCI to find out if the WhatsApp Payments is secure enough for the users of India to make transactions or not. It also wants to know if WhatsApp is collecting user's transaction data like bank account number, ATM pin and more and sharing it with its parent company, Facebook. MeitY wants to know all these details before the Facebook-owned messaging platform officially rolls out the Payments service in India next week. The feature is currently available to users in beta.

"MeitY has asked NPCI to check if WhatsApp payments are working in conformation with RBI permissions, where is it storing transactions data and if that data is being shared by its parent firm Facebook before launching a bigger version of the service," an official source told PTI.

To recollect, the Reserve Bank of India on April 5 this year had said that all payment system operators will have to ensure that all data related to payments is stored only in India and shouldn't be shared with any other institutions outside the country. After the whole Cambridge Analytica data sharing scandal, MeitY fears about WhatsApp sharing the payments or transaction details of the users in India with its parent company Facebook.

WhatsApp denies of sharing user's payments data with Facebook. The instant messaging platform said that they do use Facebook's infrastructure for the service but can assure that the payments information are not shared with the Facebook for commercial purpose.

Apparently, there are some issues with two-factor authentication issues at the time of the transaction. "There are also issues around two-factor authentication during the time of the transaction. MeitY has asked NPCI to check compliance of WhatsApp on the security of the transactions as well," the source told PTI. However, commenting on the issue, a WhatsApp spokesperson said, "the data is stored securely, and sensitive user data such as the last 6-digits of a debit card and UPI PIN is not stored at all."

While explaining the entire process of how the payments feature work, WhatsApp told PTI, "When you make a payment on WhatsApp, we send the payment instructions to our payment service provider (PSP) with the help of Facebook's secure payment infrastructure. Facebook does not use WhatsApp payment information for commercial purposes. WhatsApp chose Facebook as a service provider because it offers a best-in-class payment infrastructure that is safe and secure."

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WhatsApp Payments is a feature exclusively for the Indian market. The key idea behind rolling out the feature is to help users use one single platform to chat as well as send money to friends. For now, the maximum amount that users will be able to transfer to their contacts is Rs 5,000. The messaging app has partnered with banks like HDFC Bank, ICICI Bank and Axis Bank to roll out the service and foster cash transfer on its platform. The company will join hands with the State Bank of India once it has the necessary system in place to support transfers on WhatsApp.

With the payments feature, WhatsApp is looking forward to competing with other payment apps like Google Tez, Alibaba-backed Paytm, Freecharge and MobiKwik.

(Inputs from PTI)