Three banks - HDFC Bank, Axis Bank, ICICI Bank - are set to offer UPI handles on the payment platform.
Instant messaging platform WhatsApp is set to go live with its payments offering in India by the end of this month, said two bankers aware of the development.
While three private sector lenders - ICICI Bank, Axis Bank and HDFC Bank - are ready to roll out the product, State Bank of India is not going to go live in the first phase, they added. All the four banks were in the process of integrating with WhatsApp while the Facebook-owned company had started beta testing with ICICI Bank.
"We are continuing to work with the government so that we can provide access to payments on WhatsApp to all of our users. Payments on WhatsApp will help accelerate digital payments and this is particularly important during Covid as it is a safer way to transact for our 400 million users in India," WhatsApp spokesperson told Moneycontrol.
"Currently, both SBI and Whtsapp Pay are working closely through the integration testing phase. We are given to understand that there are some outstanding observations of CERT-In Audit report submitted by WhatsApp Pay for which they seem to have sought time till 31st May 2020 to comply with fully.
As we make available more and more convenience to our customers we are also mindful of the robust security architecture that's required to be put in place and compliant with regulatory guidelines as well.
"Bankers in the know of the matter pointed out that the public sector lender could have slowed down on its integrations with WhatsApp because of the delay in getting operational clearances from the central bank," said an SBI spokesperson.
NPCI had urged UPI third party players to move into a multi-party model in order to ensure transactions do not clog any specific bank's systems and high success rates can be maintained. Google Pay also operates with the above mentioned four banks.
WhatsApp had started the restricted testing of its payments product with clearance from the National Payments Corporation of India way back in February 2018. It remained in that stage in the past two years because the company faced multiple legal and regulatory hurdles. One of the bigger challenges was conforming to the data localisation guidelines released by the Reserve Bank of India in April 2018.
"It is working on adhering to the data localisation guidelines of the RBI and should be able to roll out payments by end of May," said the other banker quoted above. SBI is expected to join the other three banks later.
WhatsApp has also updated its privacy settings with respect to all the three banks it is working with. In the current form, WhatsApp will be offering Unified Payments Interface based digital transactions between bank accounts. But the payments product will be released in a phased manner among consumers. WhatsApp has 400 million users in India and banks cannot be prepared for a sudden jump in transaction volume which is expected once the platform goes live. As per latest estimates there are slightly more than 100 million UPI users currently.
"They will release the payments product systemically over the next few months, there was an initial plan to scale it up to 10 million but that got held up because of a public interest litigation in the Supreme Court," said one of the bankers mentioned above.
The Centre for Accountability and Systemic Change has filed a PIL in the Supreme Court to stop the beta testing of WhatsApp’s payments offering in India.
The Facebook-owned instant messaging platform is expected to give a major boost to the digital payments ecosystem in the country.
Last month, Facebook bought a 9.9 percent stake in Reliance Jio for Rs 43,574 crore. For Facebook, India has in recent years emerged as a critical market. The company has more users in India than any other country. The social networking giant collaborating with a company like Jio augurs well for its prospects.
(Disclaimer: Reliance Industries Ltd., which also owns Jio, is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd)