WhatsApp Payments is the latest entrant into India’s fintech sector. The Mark Zuckerberg-owned messenger platform confirmed yesterday that it was kicking off payments services on its existing app. The company had reportedly been running tests in the country for the past year and has now received approval from the National Payments Corporation of India (NPCI).
However, NCPI also capped the number of customers for the payments service to 30% of its user base. This regulation will come into force from early 2021. The service is only being rolled out to 20 million users in the country which is only a small fraction of Whatsapp’s current 400 million user base in India.
The escalating Indian market presents itself as a great opportunity for the Facebook-owned app service. Given how payments apps like PayTM, Google Pay and PhonePe have gone from strength to strength, it’s easy to see how the service will garner much popularity.
Facebook plans to extend even more services in the ever-rising market using WhatsApp in India. This new feature will be an added stroke in making India more conducive to small businesses therefore boosting its goal of a cashless society.
This latest payments feature has the potential to bring unprecedented ease-of-access to businesses. For instance, WhatsApp does not have to convince customers to communicate using the app; the customers already do that. Additionally, it will enable faster and easier P2P payments, irrespective of location within the country.
“With UPI, India has created something truly special and is opening up a world of opportunities for micro and small businesses that are the backbone of the Indian economy. India is the first country to do anything like this. I’m glad we were able to support this effort and work together to help 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 and others or start a business. Long term, we need more innovation that gives people control over their money, and making payments easier is a small step that can really help,” said The Zuck, chief executive of Facebook, in a video posted on Friday.
Time will tell if WhatsApp payment will be able to replace physical financial transactions altogether without inevitable online risks.