HIGHLIGHTS:
Whatsapp
launched UPI-based payments this month
Paytm
says WhatsApp is not complying with UPI norms
WhatsApp
works with other UPI apps, but the feature is hard to find
WhatsApp payments rollout started in
India earlier this month and though the feature hasn’t even become available to
all users yet, it has sparked a debate in the country’s digital payments
community. WhatsApp payments are built on top of UPI, a layer that greatly
simplifies interoperability between various banks, and questions are now being
asked if the Facebook-owned messaging app is living up to the spirit of
interoperability behind the UPI. Paytm, which operates the largest
digital wallet in India, is one of the competitors to WhatsApp in payments,
introduced its own UPI payments feature recently. Paytm
CEO Vijay Shekhar Sharma said that Facebook with
WhatsApp payments Facebook is "killing beautiful open UPI system with its
custom close garden implementation."
Sharma tweeted
this on Wednesday and from there, the narrative online quickly shifted to Paytm
being against "foreign" companies, though Sharma later clarified that
his tweets were not about a foreign company, but rather about NPCI lettings
WhatsApp integrate UPI payments without needing to incorporate safeguards other
payments apps had to integrate. NPCI is a private entity run by a consortium of
banks, which operates UPI and a bunch of other financial products, and acts as
a quasi-regulator for the payments industry. In a televised interview, Sharma
further went on to say that Facebook and WhatsApp are evil, although a Paytm
representative later stressed that he was not talking in the context of the
UPI, and that the statement was being blown out of proportion.
To understand
more, Gadgets 360 reached out to Sharma and Paytm - while he wasn't available,
the company connected us to Deepak Abbot, Senior Vice President at Paytm, to
give a detailed account of the company’s objections to WhatsApp’s payments
implementation.
"I want to
stress that this is not Paytm versus WhatsApp, this is not India versus
foreign," were the first words from Abbot, who explained that as far as
Paytm was concerned, the issue was that the NPCI had allowed WhatsApp to add
UPI features without requiring it to conform to the same rules as other apps,
including Paytm. Gadgets 360 has also reached out to the NPCI to get its views
on this question, and will update this piece once it replies.
"All apps so far had to adhere to a process by the NPCI, to create a smooth, interoperable experience that is not being required of WhatsApp," Abbot said. "NPCI requires an app password, so unless you log in no one can check your account, you should be able to log out. Now you still have the MPIN to complete the transaction but with just one factor now someone can make payments. You can't even log out. So that is not secure, and that is why all apps were supposed to have passwords."
"Every app
has a four to six week NPCI audit process, they certify the app. In the garb of
UX and UI, it's being packaged as WhatsApp to WhatsApp payments," he
continued. "A Paytm user can't send money to a WhatsApp user. The NPCI
needs to look at this, they are locking the consumer.”
This isn't
exactly correct though. In our testing, we were able to send money from Paytm
to the VPA (virtual private address) a WhatsApp user found under Settings.
Although WhatsApp is geared to make it easier to send and receive money between
its users, it's not impossible to use it to send money or receive it from
people who are not on the app. Further, the interoperability between banks is
maintained - as long as your bank is on the UPI, it'll work with WhatsApp.
However, WhatsApp on iPhone currently doesn’t let you send money to any VPA of
your choice, something other UPI-based apps support.
Abbot agreed
with this, but said that it goes against the spirit of interoperability.
"I should be able to send money to anyone, regardless of the app they're
using," he said, "and the way they've designed it is highly hidden
and you know users don't discover features that are buried behind menus."
He also rejected
the argument that WhatsApp's UPI rollout was still a beta. "Beta should be
invite only, the company controls who gets access, but if I'm on WhatsApp I can
enrol everyone I know," he said. "Such a long period for beta also
gives them an undue advantage.”
"Why when
we had to conform to all the different rules does WhatsApp get to pick and
choose? Everyone should be on the same level," said Abbot. He added that
WhatsApp must immediately bring all the UPI features that other UPI apps have
been required to support. When asked whether it would be better if all apps
could use the features they needed, he said that until all players are offering
the same features, it would not be right to change the requirements.
At the same
time, Abbot isn't in favour of increased regulatory oversight. "We all
believe the NPCI has built a great product, and take them as a regulator, and
of course the RBI is there as the final regulator," he said.
To that end,
Paytm plans to take its issues to the NPCI to try and ensure change. Once
again, Abbot stressed that this is not a case of Paytm versus WhatsApp.
"We will encourage NPCI to get WhatsApp to adhere to the
requirements," he said. However, on being asked whether Paytm is working
with other UPI companies, such as PhonePe,
or Google Tez, he said, "no, we will go
to NPCI directly."
Update: Gadgets
360 has received a statement from the NPCI where it has clarified its position
on this matter. The NPCI has stressed that this is a trial run, and that
WhatsApp will have to follow all the different UPI norms. You can read the
statement below.
National
Payments Corporation of India (NPCI)has been workingto facilitate digital
payments in the country with globally recognised products like Bharat Interface
for Money BHIM -Unified Payments Interface (BHIM UPI). We follow well-defined
guidelines for BHIM UPI services with the objective of making our platforms
interoperable 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.
Currently, NPCI has given its consent to roll out WhatsApp BHIM UPI beta launch with limited user base of 1 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. Multi-bank model offer advantages such as transaction load distribution between banks and helps to integrate popular apps easily with BHIM UPI.
Broad principles for interoperability a) ability to send and receive money through any BHIM UPI ID b) intent and collect call and c) read & generate BHIM /Bharat QR code that are required in final BHIM UPI app. BHIM UPI enabled app which fulfils such principles only will be permissible for full scale public launch.
We work towards providing seamless experience to users of BHIM UPI platform and recognise the contribution of member banks and non-bank entities to reach to this level.
Currently, NPCI has given its consent to roll out WhatsApp BHIM UPI beta launch with limited user base of 1 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. Multi-bank model offer advantages such as transaction load distribution between banks and helps to integrate popular apps easily with BHIM UPI.
Broad principles for interoperability a) ability to send and receive money through any BHIM UPI ID b) intent and collect call and c) read & generate BHIM /Bharat QR code that are required in final BHIM UPI app. BHIM UPI enabled app which fulfils such principles only will be permissible for full scale public launch.
We work towards providing seamless experience to users of BHIM UPI platform and recognise the contribution of member banks and non-bank entities to reach to this level.
Update 2: Paytm
has also sent out a response to the NPCI statement, which you can read below.
We welcome this
statement by NPCI. It addresses the concerns of interoperability violation that
we had raised. It also clarifies that the trial has been restricted to 1
million users, 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.
WhatsApp must implement login & 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
https://gadgets.ndtv.com/apps/news/whatsapp-payments-not-secure-against-upis-interoperability-spirit-paytm-1813533
