Facebook's access to WhatsApp user data is causing concern for government authorities in India, which is the largest market for the chat platform.REUTERS

Prime Minister Narendra Modi's government thinks there is genuine cause for concern that Mark Zuckerberg's Facebook will get around the server location norms by sharing user data among its associate entities. The social media platform Facebook-owned chat platform WhatsApp and photo-sharing app Instagram are prime suspects for this kind of manipulation, according to government sources. Sharing of data between the entities could constitute a breach of security, privacy and commercial information guidelines, media reports say.

The government has asked the National Payments Corporation of India (NPCI) to examine the matter and ensure that user data collected through payment services such are not shared. In this matter, the authorities have specifically flagged WhatsApp and Google Pay, the payment service that Google owners Alphabet Inc acquired by taking over Tez, a report on the Economic Times website said citing unnamed top officials. NPCI operates the country's retail payment and settlement systems.

WhatsApp has proposed to launch a payment service in a short while. It will be based on the Unified Payments Interface (UPI), a system that enables the real-time transfer of funds between bank accounts "WhatsApp so far has said that Facebook and its non-WhatsApp subsidiaries do not use WhatsApp UPI transaction data for any commercial purposes," the report quotes an unidentified official as saying.

However, the worry is that because of WhatsApp's sharing of Facebook's cloud service, there is always a chance of data leak. Officials say that when the country is debating the Personal Data Protection Bill, it is important that even "non-commercial information" or information about a user collected on the WhatsApp payment platform must not be shared with Facebook or its other subsidiaries without the users' consent.

Facebook India, Mark Zuckerberg
Prime Minister Narendra Modi speaks to Mark Zuckerberg, chairman and chief executive officer of Facebook Inc. Indian authorities are worried that the sharing of the cloud platform among Facebook and associates like WhatsApp and Instagram could endanger data security and privacy of users. Facebook India

Will Cathcart, WhatsApp's global head, said on his maiden India visit that the popular chat app plans to roll out its payment service in the country by the year-end. Cathcart's itinerary includes meetings with top officials of the Prime Minister's Office (PMO) and telecom and IT minister Ravi Shankar Prasad. The government will raise the privacy concerns at these meetings, the officials said. WhatsApp claims to have developed a system to store payment-related data in India to comply with the server location policy. While the Reserve Bank of India (RBI) and NPCI have mandated local storage of commercial data, India is also looking to protect and secure personal data through the PDP Bill, which will shortly be introduced in Parliament, the report says.

India is WhatsApp's largest market, with an estimated user base of about 400 million. Its payment service would pit it against Paytm, PhonePe and Google Pay in a market that grew 51 per cent to 31.34 billion digital transactions in FY19 and is expected to touch 40 billion by FY20 end, the report says. The WhatsApp management expects the user base to surge further with the payment service launch.

The authorities are worried that data from the online purchase of payment service may automatically go to Facebook and even Instagram without users knowing it, according to another official. If the two companies keep using the data collected by WhatsApp payment, that is a violation of the individual's privacy and must not be allowed, the official said.