WhatsApp steps out on front foot to push payments feature

The company said that it has launched a pilot programme of adopting 500 villages to familiarise villagers with digital payments

The gloves may be finally coming off WhatsApp’s payments ambitions.

On Wednesday, the company said that it has launched a pilot programme of adopting 500 villages across Karnataka and Maharashtra to familiarise villagers with digital payments through its in-built united payments interface (UPI) feature.

In a video shared by the company, village shopkeepers can be seen asking customers to pay through a WhatsApp QR code, similar to merchant QR codes offered by fintech players like BharatPe and Paytm.

“This adoption drive is like a surrogate marketing activity as WhatsApp is trying to educate the population through small value transactions and remittances. Based on its outcome, it could expand such marketing efforts,” said Mihir Gandhi, partner at management consulting firm PwC.

In another announcement made at Meta’s (formerly Facebook’s) Fuel for India 2021 event, Reliance Jio said that its users could pay for pre-paid recharges directly through WhatsApp. However, Jio does not allow the same on other major UPI apps as yet.

Until last month, the Facebook-owned messaging platform was barred from having more than 20 million users avail of its payments feature. But, that cap was loosened in November and extended to 40 million users.

The cap has been one of the reasons that WhatsApp has not aggressively marketed its UPI feature even as players like Google Pay, PhonePe, Paytm and Amazon Pay have been splurging to attract more users and transactions through cashbacks and discounts.

Although WhatsApp was reportedly testing a small amount of cashbacks last month, it has not yet gone aggressive with such incentives.

“I think WhatsApp might be taking a different approach compared to players like Google Pay, PhonePe and Paytm whose strategy has been to incentivise transactions through cashbacks and other vouchers. We don’t know clearly yet, but WhatsApp might be trying to get people to use its payments service through a use-case driven model,” said Gandhi.

While WhatsApp accounted for just 310,000 of the 2.2 billion transactions through UPI in November, Google Pay led the market with a 43.4 per cent share, followed by PhonePe at 39 per cent, Paytm Payments Bank at 11.7 per cent and Amazon Pay at 1.7 per cent.

This wide gap has come about amid WhatsApp’s payments ambitions in India facing regulatory and legal challenges. First, it was denied a regulatory nod over data localisation concerns in 2018. Then came a Supreme Court order asking it to refrain from launching the feature before getting a go-ahead from regulators. Over the past year, multiple petitions have questioned its alleged anti-competitive practices, data localisation efforts and privacy policies.

After the cap was extended to 40 million users last month, Manesh Mahatme, director-Payments, WhatsApp India, said that as the adoption of “payments on WhatsApp” increases with users across the country, the company would be looking forward to working with the National Payments Corporation of India (NPCI) to further expand it to all users.

There were over 487 million WhatsApp users in India in October this year, making it the leading country in terms of WhatsApp audience size, according to data from Statista.

Meanwhile, the UPI ecosystem has grown fast over the past year-and-a-half as a result of pandemic-driven digital adoption — the number of transactions increased from 19 billion in FY20 to 22 billion in FY21, and the NPCI expects to cross the 40-billion mark in FY22.

In October, aided by the festive season, the volume of transactions on the platform crossed 4.2 billion and the value of those transactions surpassed the $100-billion (Rs 7.49-trillion) mark. The number of transactions saw a slight decline in November, with the platform recording 4.18 billion transactions amounting to Rs 7.68 trillion.

            Cha-Ching!
 

• Number of UPI transactions increased from 19 bn in FY20 to 22 bn in FY21, and the NPCI expects to cross the 40-bn mark in FY22 

• WhatsApp accounted for just 310,000 of the 2.2 bn transactions through UPI in November

• Google Pay led the UPI market in November with 43.4% share, followed by PhonePe at 39% and Paytm Payments Bank at 11.7%

• Until last month, the Facebook-owned messaging platform was barred from having more than 20 mn users avail of its payments feature. Now, that number is 40 mn

• WhatsApp said last month that it will work with NPCI to extend its UPI payments feature to all its estimated 500-odd million users in India