Mobile Payments

WhatsApp’s Expanding Payments Footprint


As of Wednesday (August 1) South Africa’s Absa Group officially rolled out WhatsApp banking as part of its continuing effort to develop a digitally-led bank in Africa. Absa has signed on 10,000 customers since early July, according to Reuters.

The service will not be without competition on the chat-based financial services front. WeChat — the largest mobile messaging system in China — has been open for business in Africa since 2013 and already offers a wide array of financial service functions for users, including money transfers, airtime purchases and prepaid electricity.

“As technology advances and more customers become connected, bringing banking to where our customers are is important to us, especially as we continue our journey to become a digitally-led business driven by innovation,” chief executive of Absa retail and business banking Arrie Rautenbach said in a statement.

The addition of WhatsApp banking is part and parcel to a growth plan for Absa that observers have called “ambitious.” The goal — once it has completed its separation from Barclays — is to capture (and in some cases recapture) market share in South Africa and double sales across the African continent from 6 percent to 12 percent. WhatsApp allows Absa to offer banking services that are available anywhere, anytime, to customers that want to use it.

Absa’s WhatsApp service, ChatBanking, will mostly be simple banking transactions. Users will be able to check their account balances and make payments to existing beneficiaries using brief and natural sounding conversational commands.

WhatsApp is not Absa’s only partnership in this arena. Abasa’s CIO announced at the ChatBanking launch event that it had an additional partnership with mobile messaging firm Clickatell. Absa also launched ChatBanking with Facebook Messenger and Twitter two years ago.

The South African launch of chat banking financial services comes as Facebook — WhatsApp’s corporate parent —  is actively and openly looking to build out the ecosystems around both WhatsApp and its Messenger platform. Facebook CEO Mark Zuckerberg confirmed as much for investors during a recent call with analysts following its Q2 earnings report, when he noted that the business ecosystems for its chat platforms will be a core focus of the next five years.

Central to the expansion of the ecosystem around WhatsApp is the expansion into payments service capacity in India — the largest market for WhatsApp with some 200 million users. WhatsApp has been testing its payments services for the last few months with about one million users in India. According to Zuckerberg, the service has performed strongly and it “gives people a really simple way to send money to each other and contribute to greater financial inclusion.” Facebook is awaiting government approval to begin rolling out the service to its massive Indian user base.

Getting that approval, however, has proved to be a steeper uphill march than initially anticipated. Though there were rumors the service was set to launch at the beginning of July, delays have abounded. Government officials at the Ministry of Electronics and Information Technology (MeitY) are concerned about fake news on the platform, citing a series of WhatsApp rumors earlier this year that ended with lynchings. There have also been concerns about how and where user data will be stored.

The government has also recently ruled that WhatsApp must set up an office in India and recruit an India-specific team if Facebook wants to launch the financial service to WhatsApp’s entire user base.

“Our point to them was, you want to start payments service for 220 million people but you cannot do it by remote control,” a senior official from MeitY told the Economic Times, noting that plan for remote control of some functions violates Indian laws that require data to be securely stored in-nation.

Facebook remains committed to working the situation out, according to Zuckerberg, but is also apparently looking to build that ecosystem in other places while it waits for India to get online.

“All signs point to a lot of people wanting to use this when the government gives us the green light. And in the meantime, we’ve broadened our focus to building this for other countries so we can give more people this ability faster,” he said.

Which other countries? Zuckerberg didn’t say. But Brazil, much of South America and nearly the entirety of sub-saharan Africa all show WhatsApp as the nation’s number one chat app.

The developing world is a big, and increasingly mobile-payments-friendly space — and WhatsApp already has a big presence in most of it.


Featured PYMNTS Study: 

With eyes on lowering costs to improving cash flow, 85 percent of U.S. firms plan to make real-time payments integral to their operations within three years. However, some firms still feel technical barriers stand in the way. In the January 2020 Making Real-Time Payments A Reality Study, PYMNTS surveyed more than 500 financial executives to examine what it will take to channel RTP interest into real-world adoption. Here’s what we learned.