WhatsApp, on Saturday, has announced that is updating its terms of service and privacy policy to "reflect the addition of payment interoperability features" ahead of the full-fledged launch of the service. The messaging application is currently testing its payments service in India.

Nearly one million users are testing WhatsApp's payments service in India, which is the largest base for the Facebook-owned company. WhatsApp has over 200 million users in India whereas Facebook has 1.5 billion users globally.

"We'll be updating our WhatsApp payments Terms of Service and Privacy Policy to provide simpler language on how the payments feature operates. It also reflects the addition of payment interoperability features we’ve added since the beta started," a WhatsApp spokesperson told PTI.

The spokesperson added that the company has worked closely with National Payments Corporation of India (NPCI), bank partners, and the Indian government on these details of how its service works.

The NPCI has permitted WhatsApp to tie up with banks to facilitate financial transactions via Unified Payments Interface (UPI).

"We still do not have a launch date but this terms and policy update brings us one step closer to full launch," the spokesperson said but declined to comment on the launch date of the service.

Over the last few months, WhatsApp payment service has been in beta testing. Industry watchers expect the full-fledged launch in the next few weeks.

As part of the updated terms, WhatsApp said it may collect additional information when payments service is used. "We've added new features like interoperability that request additional information related to WhatsApp payments user and user of any BHIM UPI-enabled app," the spokesperson said.

The terms state that WhatsApp collects information "when you send, receive, or request a payment, including the date and time and reference transaction number". Besides, when someone makes a payment to a WhatsApp contact, the company collects the sender and receiver's names and BHIM UPI IDs.

The company added that it uses "all the information we have to operate, provide, improve, understand, customize, support, and market our services."

"This includes using the information to provide payments and customer support, to protect you and others using our services from fraud, abuse, or other misconduct, and to review your account activity to determine whether you continue to meet our Terms and Payments Terms," it added.

The Reserve Bank of India has mandated all payment system operators to ensure that data related to payments is stored only in India giving firms six months to comply with it.

According to sources, the ministry of electronics and Information Technology has asked NPCI to check if WhatsApp's payments service conforms with the Reserve Bank of India rules and data security of customers.

WhatsApp had stated that sensitive user data such as the last 6 digits of a debit card and UPI PIN are not stored at all.

By Sowmya Sangam