The Indian government has told WhatsApp that it cannot set up its payments service in India till the time it has an office and has recruited a team for the purpose, Economic Times reported.
The government will also consult the Reserve Bank of India on whether payments solutions that are remotely controlled break any rules on the setting up of financial services in India. These hurdles have further delayed the launch of WhatsApp Payments in the country.
ET further said that this was conveyed to the messaging service provider earlier in July, when a WhatsApp team, led by their COO, met with officials from the ministry of electronic and IT.
The payments service has been in testing for the past few months and will soon cross the permitted one million users limit.
The ministry had earlier raised concerns about WhatsApp's payments service that its pilot was not following the two-factor authentication process and that the service shares data with Facebook, WhatsApp's parent company.
The letters from the ministry were sent to the National Payments Corporation of India (NCPI) and the Reserve Bank of India (RBI).
According to a WhatsApp spokesperson quoted by ET, the company's top priority is to hire a local team on the ground.
The ministry is concerned about who will be held responsible if a dispute in payments arises. “WhatsApp might simply say my commercial dealing is with a bank, they are using my app, and we are not in your jurisdiction at all,” said an official from the ministry to ET.
(With inputs from The Economic Times.)