Will NPCI's Diktat To WhatsApp To Revise Localization Framework Delay Payments Launch?

NPCI has asked WhatsApp to make some changes in its framework for complying with data localisation
Will NPCI's Diktat To WhatsApp To Revise Localization Framework Delay Payments Launch?
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Facebook-owned WhatsApp’s troubles in India refuse to boil down. Amid the ongoing tussle between the company and Indian government regarding the launch of the company’s payment service WhatsApp Pay. The National Payments Corporation of India (NPCI) has now asked the messaging platform to make some changes in its framework for complying with data localisation, reported according to a report in the The Economic Times . WhatsApp is yet to respond to the suggestions made by NPCI.

While the troubles regarding the launch of WhatsApp Pay in India has been brewing for more than a year now, it is still unclear what steps would the company follow to finally comply with the rules and regulations. 

This move comes in after, one of the “Big Four” accounting companies Deloitte had prepared third-party audit data report on WhatsApp’s compliance with data localization  rules. Citing sources, ET said that the submitted report has been sent back with directions to make some changes.

In July, WhatsApp's Global Head Will Cathcart had told The Times of India in an interview that the company is 100 per cent in compliance with the data localization rules. The company had no more additional comments on the matter.

WhatsApp Pay On Shaky Grounds

WhatsApp, which has over 450 million users in India, was scheduled to launch its payment service in May 2018. However, the plan got delayed over data localization rules and the Supreme Court’s order to set up an office and team in India.

In April 2018, the Reserve Bank of India had issued a circular which directed all the payment companies to store data of Indian users in local servers only to safeguard the users from data breach incidents. 

In October 2018, the messaging platform had said that it had built a system to store users' payment data locally within the country in compliance with the RBI circular. However, the plan was cited as “not enough” by NPCI. According to NPCI, the company failed to clearly state that if the user data will be stored “only” in India or will it be saved in overseas servers as well.

WhatsApp’s Trouble With Encryption

The messaging platform as also been locking horns with Indian authorities over the Centre’s orders to trace messages being shared on the platform. The company refused to comply with the order stating that this would require them to break their “end-to-end encryption” feature which may hinder user privacy.

However, IIT Madras professor V Kamakoti, who serves on the board of National Security Advisory Board (NSAB) had proposed ways to ensure traceability without breaking encryption. The suggestions are being reviewed by the Madras High Court, according to reports.

According to Prof Kamakoti, WhatsApp could embed information about the originator of a text along with the encrypted message. He also proposed that such information will also remain encrypted, but can be shown to law enforcement if the situation demanded.

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