Paytm’s Vijay Shekhar Sharma irate at WhatsApp, to file plaint

Vijay Shekhar Sharma, founder of India's largest digital payments firm Paytm, is crying foul over WhatsApp's new UPI (unified payments interface) feature. Sharma 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.

Sharma is also unhappy about the absence of log-in sessions in WhatsApp's new feature.

WhatsApp's trial service launched in India last week does not require a log-in session or Aadhaar-based payments.

Owned by Facebook, WhatsApp boasts a monthly user base of 200-250 million in India and its entry into the country's digital payment space threatens to upend things for Paytm, which gained hugely from the government's demonetisation decision last year.

''Facebook is openly colonising our payment system and is customising UPI to their benefit. UPI was built as an India Stack, now some American monopoly arm-twists UPI for customer implementation,'' Sharma told ET.

He added that the lack of login requirement makes WhatsApp Payments an "open ATM" to everyone and is a security risk, pointing out that WhatsApp is used by ''gullible'' Indian users far more than any other app.

WhatsApp with a monthly user base of 250 million in the country is going to roll out the feature to its massive customer base, which will disrupt India's digital payment space. Sharma questioned how WhatsApp is allowed to start off the feature with such a huge user base, when it should have started on a pilot basis with 5,000 to 10,000 users.

''How can you give such a security risk just in the name of underwriting that banks have given,'' he asked.

Sharma clarified that he is not against international companies but simply is asking for a level playing field. "India is an open internet economy that welcomes every company that plays fair," he said. Before WhatsApp, Google launched its payments service Tez last year.

Representatives for Paytm confirmed that WhatsApp's vice-president Neeraj Arora has stepped down from the board of Paytm, a position which he held since 2015.

Email queries sent by ET to WhatsApp and NPCI did not elicit immediate response.

NPCI has 10 core promoter banks, including State Bank of India, Punjab National Bank, Bank of Baroda, ICICI Bank, HDFC Bank and HSBC. In 2016, the shareholding was broad-based to 56 member banks.

WhatsApp's entry, backed by deep pockets of Facebook, comes close on the heels of search giant Google's launch of its payments service Tez last year, making India the first market in the world where the global technology giants including Amazon are competing for market share in the payments space.

Sharma clarified that he is not taking a stand against overseas companies, but asking for ''a level-playing field'' against competitors.

His firm, last valued at about $10 billion, counts China's Alibaba and Ant Financial besides Japan's SoftBank as key shareholders.

''This is not about Indian companies versus international companies. India is an open internet economy that welcomes every company that plays fair,'' he said.

An industry executive aware of WhatsApp's payments product has rebutted Sharma's claims. ''While NPCI has advised UPI apps to have login sessions, it is not compulsory. Even other apps that use UPI, like Ola and Uber, don't have login sessions,'' the person said, adding that WhatsApp has a session management in its app which needs to be customised to UPI guidelines.

''WhatsApp has done a good payments app and other incumbents are just spreading fear,'' said Amrish Rau, India head of global payments firm PayU. ''These are just market gimmicks. WhatsApp is following the usual process for UPI. Spreading rumours is not helping Digital India,'' he added.

In a response to comments made by rivals, Sharma said that his company along with Google's Tez are the only players who are large enough to matter.

''Paytm is the majority transaction driver of UPI followed by Google. Everyone else is (small),'' he said.

Industry body Nasscom said that it hopes that there will be a level playing field going forward. ''I would expect that the core principle of UPI - seamless interoperability - will be respected and interoperability will be more clearly and visibly supported by WhatsApp going forward. It is early days and the product is in beta or pilot,'' said Prasanto K Roy, vice-president of Nasscom's Internet Council.