NPCI clarifies on WhatsApp payment service; Paytm still queasy

Seeking to clear the air on the issue of "lack of fair play" in allowing WhatsApp to test a payment feature, the National Payments Corporation of India (NPCI) on Friday said that the full scale public launch of the feature will be permitted only after the Facebook-owned platform meets all the required norms.

NPCI said it has allowed WhatsApp to beta test its payments service with limited user base of one million and low transaction limit. WhatsApp payment service will rival the likes of Paytm.

Paytm founder Vijay Shekhar Sharma had last week alleged that the US firm was getting unfair advantage. Sharma had said he will approach National Payments Corporation of India (NPCI) that developed the UPI system and even higher authorities if needed to address the ''unfair leverage'' granted to WhatsApp (See: Paytm's Vijay Shekhar Sharma irate at WhatsApp, to file plaint).

''Currently, NPCI has given its consent to roll out WhatsApp BHIM UPI beta launch with limited user base of one million and low per transaction limit. Four banks will join the multi-bank BHIM UPI model in phases (in the coming weeks) and full feature product shall be released after the beta test is successful,'' NPCI said in a statement. It added that multi-bank model offers advantages such as transaction load distribution between banks and helps to integrate popular apps easily with BHIM UPI.

According to Deepak Abbot, senior vice president, Paytm, WhatsApp has custom-implemented the UPI system, which is not secure.

"Our objection to WhatsApp's UPI payments system is not about competition, but fair play. The company has custom-implemented UPI to affect the platform's core principle of inter-operability," Abbot said in a statement given to media.

The NPCI statement noted that broad principles for inter-operability like ability to send and receive money through any BHIM UPI ID, intent and collect call, and read and generate BHIM/Bharat QR code are required in final BHIM UPI app. "BHIM UPI enabled app which fulfils such principles only will be permissible for full scale public launch," NPCI stressed.

"We follow well-defined guidelines for BHIM UPI services with the objective of making our platforms inter-operable and based on open standards, convenient and secure, offering multiple choices to consumers for rapid adoption for digital payments through banks and payment ecosystem players," it said.

Responding to the NPCI statement, a Paytm spokesperson on Friday said that it addresses their concerns of inter-operability violation, "though we feel that a product with the stated violations could have been tried out amongst a much smaller base".

"We are still concerned that this statement is silent on the critical issue of safety / security of a financial transaction through UPI, where consumers need to mandatorily sign-in with username and password. This violation is fundamental and very serious," Paytm said in the statement.

"WhatsApp must implement login and password like all other BHIM UPI apps. This statement is also silent on other issues such as the requirement to send SMS notifications for every UPI transaction. We hope that future rollout will be fully compliant with all the guidelines. We wait to hear NPCI views on some of these missing aspects," it said.