Whatsapp pay to grab the digital payment space in India

Whatsapp pay will finally be fully launched in India. In 2018, WhatsApp Pay was offered to one million users in India as part of beta testing. India is also the first market where the Facebook-owned company piloted the service. The potential of the payment services was witnessed post the testing phase. However, it couldn’t launch formally because of the delay in approval by NPCI.

Security related issues 

The Reserve bank of India, reportedly blocked a full-fledged launch of the service citing data localization norms. RBI's data localisation norms require foreign companies to store transaction and user data inside India and delete the data from foreign servers within 24 hours. However, the messaging application had assured in the past that it would step up its security arrangements to ensure best data privacy levels to its users. The application had introduced native fingerprint lock last year, a feature that also exists in popular payment apps like Google Pay.

The National Payments Corporation of India (NPCI) has granted WhatsApp permission to operate its digital payment service in a phased manner. In the first phase of the rollout, the WhatsApp Pay will be made available to over 10 million people through the messaging app.

Digital payment space in India

Ever since the government launched its flagship payments interface in UPI, it has seen a massive uptick due to its ease of use, security and accessibility across apps. UPI registered over 1.3 billion transactions worth INR 2 trillion in December 2019, according to data from the National Payments Corporation of India. Post the successful launch, WhatsApp Pay is likely to become one of the largest mobile payments apps in India considering the messaging app has over 450 million users in the country.

Partnering with banks

This payment services by whatsapp is said to be launched initially in partnership with three private banks, namely Axis Bank, HDFC Bank, and ICICI Bank. Public sector State Bank of India (SBI) will join at a later stage. Google Pay and Truecaller are amongst the major platforms allowing transactions via multiple banks at the present stage. Interestingly, Google Pay already has Axis Bank, HDFC Bank, ICICI, and SBI as the four acquiring banks to enable UPI-based transactions.

Further growth

Facebook also has plans to go beyond India with WhatsApp Pay. CEO Mark Zuckerberg at the time of Facebook's earnings in late January mentioned that the company wants to roll out the payments service in several countries in the next six months. The payments app like Paytm, Phone Pe and even Google Pay are not merely used for transferring money or making payments. These apps also come with features that allow users to book movie, train, plane tickets, recharge their metro cards, DTH etc. Some apps also allow users to transfer money directly to their bank accounts. It would be interesting to see what services the WhatsApp Pay will provide to its users.