WhatsApp receives approval to expand its payments service in India
WhatsApp, which began testing its payments service in India with 1 million users in early 2018, has finally began to expand the feature to more users within the world’s second largest internet market.
The Facebook-owned service said Friday that it's rolling out payments in ten Indian regional languages within the latest stable version of WhatsApp app on Android and iOS. The announcement comes hours after National Payments Corporation of India (NPCI), the body that operates the favored UPI payments infrastructure, said that it had granted approval to WhatsApp to roll out UPI-powered payments in the country.
Like Google, Samsung and variety of other firms, WhatsApp has built its payments service atop UPI, a payments infrastructure built by a coalition of huge banks in India. NPCI said WhatsApp, which has amassed over 400 million users in India, can expand payments to its users during a “graded manner,” and to start out with, it can only roll out the payments service to twenty million users and has got to work with multiple banking partners. (WhatsApp said today it's working with five leading banks in India: ICICI Bank, HDFC Bank, Axis Bank, the depository financial institution of India, and Jio Payments Bank.)
Google and Walmart currently dominate the mobile payments market in India, together commanding roughly 80% of the UPI market share. UPI has emerged because the hottest digital payments method in India, thanks partially to New Delhi’s abrupt move to invalidate quite 85% of the paper cash circulation in the nation in late 2016. UPI’s popularity has diminished the relevance of several firms in India, including SoftBank and Alibaba-backed Paytm that spent years building mobile wallets. Unlike UPI apps, mobile wallets aren't interoperable with other mobile wallets, and levy little fee to consumers.
“With UPI, India has created something truly special and is opening up a world of opportunities for micro and little businesses that are the backbone of the Indian economy. India is that the first country to try to to anything like this. I’m glad we were ready to support this effort and work together to assist achieve a more digital India. I want to thank all our partners who’ve made this possible. When people can access financial tools, they’re more empowered to support themselves et al. , or start a business. Long term, we'd like more innovation that provides people control over their money, and making payments easier may be a small step which will really help,” said Mark Zuckerberg, chief executive of Facebook, in a video posted Friday.
WhatsApp’s payments rollout in India in early 2018 quickly saw a two-and-a-half-year regulatory maze as various bodies within the country expressed concerns over users’ payments data and whether the Facebook-owned service wielded an excessive amount of power and advantages over other payments apps. You can read more about this here (paywalled).
While WhatsApp has been cleared of these concerns, industry veterans believe the payments service on the app — more popular than the other smartphone app within the country — will see a way faster adoption than its rivals as all its potential users are already using it for chatting with friends. (Google launched a standalone payments app in India, as an example .)
NPCI’s announcement today comes minutes after it said it might be enforcing a cap on third-party apps to make sure that no single app processes quite 30% of all UPI transactions in a month. It’s evident that WhatsApp has already suffered an excessive amount of due to regulatory troubles in India, its biggest market by users. But NPCI’s decide to enforce limit on other apps should help WhatsApp in how eventually — though return to bite again later.
At stake is India’s mobile payments market, which is estimated to reach $1 trillion by 2023, according to Credit Suisse. Today’s announcement would also help WhatsApp, increasingly looking to diverse into more businesses, make an extra push into the mobile payments market.
It unrolled payments in Brazil in June this year, but was quickly ordered to suspend the service by the nation’s financial institution . Brazil’s financial institution said it took the choice to “preserve an adequate competitive environment” within the mobile payments space and to make sure “functioning of a payment system that’s interchangeable, fast, secure, transparent, open and cheap.” Luckily in India, UPI is fast, open, interchangeable, cheap and, to an outsized extent, transparent.
Facebook itself has made an enormous push in commerce within the past year. And if WhatsApp gains traction with payments, it could open more avenues for its parent firm. Facebook is aware: Earlier this year, the social juggernaut invested $5.7 billion in Indian telecom giant Jio Platforms, the most important foreign direct investment within the technology space in India. Facebook executives have said that they decide to work with Jio Platforms to explore ways to digitize India’s 60 million small and medium-sized businesses. Jio Platforms is travel by Mukesh Ambani, India’s richest man. Ambani is additionally an in depth ally of Indian Prime Minister Narendra Modi.
WhatsApp has also added a variety of commerce features to its platform in recent years.
0 Comments