WhatsApp fallout: Govt flags risks to payments through social media companies

NEW DELHI: The government is approaching the Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI) over the risks in allowing social media platforms such as WhatsApp into the digital payments space in light of the recent hack of the messaging app.

The move comes as the hacking issue is being monitored at the highest levels of government.

“We are reaching out to the NPCI and the RBI to discuss safety features and in case some extra steps need to be undertaken to ensure security of financial data is not breached,” a senior government official told ET.


The recent lawsuit filed in the US against Israeli company NSO and its software Pegasus, said to be responsible for the intrusion, had spread alarm among Indian authorities, he said. Facebookowned WhatsApp has maintained that the platform is secure thanks to end-to-end encryption, the official pointed out.

MeitY-WhatsApp Row Continues
The latest development could mean further delays in the launch of WhatsApp’s payment feature, which is yet to pass the test of compliance with India's financial authorities, experts said.

Facebook CEO Mark Zuckerberg said recently that the company was optimistic about starting soon.

The messaging app, which has about 400 million users in the country, has been testing its payment service in India since last year and will be pitted against the likes of Paytm, Google Pay and Phone Pe in the fast-growing payments space.

Meanwhile, the row between WhatsApp and the Indian authorities continued with company insisting it had informed the government of the security breach, along with details. The government said the information submitted had at best been speculative in nature.

“We maintain that WhatsApp didn’t disclose entire information to us. We learnt of it through media reports,” the official said.

The government said WhatsApp did inform CERT-IN about the hacking incident, but maintained that the social media app didn’t disclose the names and identities of Indian citizens affected by the breach to the authorities, which it should have.

The controversy began with WhatsApp/ Facebook filing a lawsuit in the US against the Israeli company NSO on October 29, within days of the Indian Supreme Court allowing the Centre to issue intermediary guidelines in three months.

The guidelines are expected to allow the government to legally bind WhatsApp and any other messaging platform to tracing the source of any message on their platforms. WhatsApp has resisted this, saying it would be impossible without compromising the encryption that supposedly guarantees user privacy.