Popular messaging platform WhatsApp, which has around 400 million users in India, on Thursday said the company would roll out its payments service later this year.
Will Cathcart, WhatsApp’s global head, said that after increasing its business usage, especially with small entrepreneurs, the next step was “to provide payments to all of our users”.
Payments through WhatsApp were introduced to a test group of a million users in February last year. The service is based on the Unified Payments Interface standard, which has been developed by the National Payments Corporation of India. “The idea is to make it easy for someone to send money to someone else through WhatsApp — the same way they send a message. We believe that if we get this right, it will accelerate financial inclusion and bring value for people in India’s fast-growing digital economy, We can’t wait to provide the service to more users all across India later this year,” said Cathcart.
He was speaking at an event to announce WhatsApp’s partnership with the NITI Aayog, under ts Women Entrepreneurship Platform. WhatsApp also pledged $100,000 towards Women Transforming India (WTI) Awards 2019, an initiative of the NITI Aayog. NITI Aayog CEO Amitabh Kant encouraged WhatsApp to take up more local causes in India.
Facebook, which owns WhatsApp, is betting big on growth of digital payments in India. CEO Mark Zuckerberg during an earnings call had said it was in the process of a full-fledged launch of WhatsApp Pay in April this year.
The move would put the Menlo Park, California-based social media giant in direct competition with players like Alphabet’s Google Pay, Walmart-owned PhonePe, Amazon Pay and Alibaba-backed Paytm. These companies are already locked in a fierce battle to dominate the digital payments space in the country.
The road to launch WhatsApp Pay has not been smooth for the company. The government has raised concerns over the authentication mechanism used by the service and also compliance with the Reserve Bank of India’s data localisation norms.
WhatsApp said last October that it had built a local system to store payments-related data to comply with the RBI’s data localisation requirement.
In an RBI affidavit submitted to the Supreme Court in March, however, the banking regulator said that WhatsApp’s Pay is yet to comply with its data localisation norms. In May, it told the Supreme Court that the trial run would likely be over by July, and that it would not launch payments services without fully complying with the RBI’s norms.
WhatsApp has been engaging with the RBI and other government ministries to sort out these issues. Meanwhile, it also began testing payments in other markets. “We have a test that is running in India for WhatsApp now. We're hoping to launch in several other countries at some point, but I don't want to put a timeframe on that here. But it’s something that we’re actively working on,” Zuckerberg had said in the April earnings call.
He had also said the goal would be to have something where users can do discovery through Instagram and Facebook and then complete the transactions and follow up with businesses individually, and have an ongoing relationship through Messenger and WhatsApp.
This is something Facebook tried with its Marketplace product in India, but in the absence of an inbuilt payment mechanism like WhatsApp Pay, the offering has not been as popular as it would have hoped.