Digital Payments

India Regs Challenge WhatsApp Over Digital Payments Services

WhatsApp could violate antitrust law with payments rollout

Facebook’s WhatsApp could be abusing its position of power in India by stealthily offering payment options, according to Reuters.

There was a complaint filed in mid-March that the messenger app was being used to offer Indian consumers a new digital payment service that circumvents Indian authoritative channels.

WhatsApp is at a crucial moment in India as it tries to get its payment service off the ground. The messenger app has been beta-testing that service with 1 million users in the country. The service, which allows inter-bank fund transfers within the app, has not been authorized to go out to the entire country yet.

The bundling of the messenger and payment service, though, could end up violating antitrust laws with too much consolidation of services in the same app, Reuters reported, citing a source.

The antitrust complaint has been leveled at both Facebook and WhatsApp, but India’s watchdog, Competition Commission of India (CCI), said only WhatsApp needs to be investigated. The complainant has not been investigated, although some reports said a lawyer made the complaint.

The payment service will face India’s other payments giants like Paytm, which is backed by Softbank, and Google’s payment service. Both of them have tens of millions of Indian users.

WhatsApp’s payment service is unlike others in that it is based on the Unified Payments Interface (UPI) standard, so users don’t have to enter a net banking password or ID to send or receive money.

Amid all of this, ICICI Bank recently began offering banking services via WhatsApp, finding the messaging service an easy way to do business during the coronavirus pandemic. Executive Director Anup Bagchi said it would likely be helpful for customers to be able to multitask by doing banking while on social media at the same time.

The move into the digital payments space comes as WhatsApp also considers getting into the loan business for its user base in India.

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