WhatsApp is trying to make payment services available to all its users in India

• Chris Daniels, the CEO of WhatsApp, submitted a formal request to India’s central bank last month to allow the messaging platform to offer payment services to all its Indian users.
  
• WhatsApp commenced the pilot phase of its Indian payments service earlier this year and currently offers the service to one million users.
  
• India’s digital payments space is a rapidly expanding market and is expected to total $1 trillion by 2023, according to Credit Suisse.
  

The wait for WhatsApp’s full-fledged digital payments licence in India continues. Chris Daniels, the CEO of WhatsApp, submitted a formal request to India’s central bank last month to allow the messaging platform to offer payment services to all its Indian users, according to the Press Trust of India.

WhatsApp commenced the pilot phase of its Indian payments service earlier this year. It currently offers the service, which is compliant with the government’s Unified Payments Interface (UPI), to one million users. Once it receives approval from the Reserve Bank of India, it will expand access to the service to all 200 million of its Indian users.

The impetus behind the move is to make the transfer of cash as easy as sending a message. In the letter, Daniels said that WhatsApp and its banking partners had fulfilled all the security requirements for its payments service.

New leader, large checklist

WhatsApp recently hired its first Indian head of operations, Abhijit Bose, from the payments industry following instructions from the Indian government to set up a local office for its Indian operations. Bose, who is the co-founder of point-of-sales mobile payment service EzeTap, has his work cut out for him in the next few months.

The Indian government has mandated the local storage of citizens’ data, a condition that WhatsApp is in the process of complying with. In addition to data storage norms, WhatsApp will also have to weather a hit to its reputation in India following revelations that the service has been used to spread fake news resulting in mob-facilitated violence.

This entails a comprehensive strategy to fight the spread of misinformation on its platform. Quick fixes that the service has implemented include the identification of all message forwards and limiting the ability to forward a message to more than five people at once.

Enough pie to go around?

India’s digital payments space is a burgeoning market and everyone wants a bigger slice of the growing pie, which Credit Suisse estimates will total $1 trillion by 2023.

At the end of September, Warren Buffett’s Berkshire Hathaway invested $300 million in market leader Paytm. That was roughly a month after Amazon bolstered its own payments business in India with the acquisition of Tapzo.

Meanwhile, Google, which launched its UPI-based Tez payment service (now Google Pay) a year ago, is planning an expansion into the retail and microfinance space.

The entry of Whatsapp into the Indian digital payments market is bound to scare incumbents like Paytm and Google Pay. The service is the preferred messaging platform for most Indians with smartphones and hence, its payments service should have no difficulty gaining traction with individuals and small businesses.


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