Facebook-owned WhatsApp, which is betting heavily on India, is set to launch its payments feature in India by the end of May. WhatsApp Payments has tied up with three private-sector banks --- Axis Bank, HDFC Bank, and ICICI Bank --- for the same.
However, the government-owned State Bank of India, which was originally in the process of integrating with WhatsApp is not ready to take this service live in the first phase, according to a report published in Money Control. The report, quoting a bank spokesperson, said this might be because of the delay in getting operational clearances from the central bank (RBI).
A WhatsApp spokesperson said they were constantly working with the government to deliver access to payments feature to all of its users. Payments on WhatsApp is expected to significantly accelerate digital transactions in India, especially in the current Covid-19 crisis.
Earlier this year, Whatsapp was granted regulatory approval from The National Payments Corporation of India (NPCI) to operate WhatsApp Pay in India.
Major splash in digital economy
WhatsApp Pay beta-tested in India in 2018, and it amassed 1 million users, but the government introduced privacy-related regulation soon after that precluded it from going live to all users.
The beta was launched in February 2018 and offered P2P capabilities when users linked their accounts to a bank account. And it did go on to meet the RBI's data localization regulations prior to the October 15, 2018 deadline by providing domestic data storage.
In meeting the regulation, WhatsApp's plans to roll out its payments service were indeed delayed, but it's now poised to take off without wasting too much time.
The social messaging app has more than 400 million users in India and more than 2 billion users worldwide. With these many subscribers to the app, India is the largest market for the app currently.
Not surprisingly, the upcoming WhatsApp Pay service is expected to create a major splash in terms of digital transactions. WhastApp Pay aims to take on already established digital payment gateways in the country, mainly Google Pay and Paytm.
WhatsApp is well primed for this contest, it would appear. Its parent Facebook bought a 9.9% stake in Reliance Jio for ₹43,574 crore. The partnership between Facebook and Jio is unprecedented in many ways. Jio Platforms has an estimated user base of over 380 million across the country.
WhatsApp Pay is expected to follow the tracks of China's WeChat Pay, which leverages on the popularity of its parent platform. WeChat Pay is a top player in China's mobile payment market, with 800 million monthly active users (MAU), and its success is largely due to it being part of WeChat's ecosystem, which boasts over 1 billion MAU.
This is the blueprint for WhatsApp Pay now.
