WhatsApp, Facebook’s messaging app, is still working to launch its digital payments service nationwide in India.
WhatsApp Pay, which is facilitated by the Indian government’s UPI payments system, began testing its service in the country earlier this year with around one million users. Since then, it has processed about one million transactions per month, according to people close to the National Payments Corporation of India (NPCI). India is WhatsApp’s biggest market, with 210 million monthly users.
Yet despite its progress, the Financial Times reports that WhatsApp has not been able to expand nationwide because the country's regulators want payments data to be processed in India instead of on Facebook’s servers. Despite meetings throughout 2018 between WhatsApp’s chief executive and India’s central bank governor, the two have not been able to come to an agreement.
Currently, there are more than 1 billion mobile phone users in the country, and the digital payments market is expected to reach $1 trillion by 2023. With that in mind, “I think it’s safe to say it’s pretty important for us to launch payments in India,” said one person close to the company.
And analysts believe WhatsApp has the potential to be a major threat to Indian-based Paytm.
“Based on my knowledge of the payments system in India over the last 10 years, WhatsApp Pay will be viral,” said Ram Rastogi, an architect of the UPI system in India, and former employee of the NPCI. “Indians want something they are used to, in a language they can read and write in. WhatsApp’s willingness to provide services in 13 major languages in India can play a vital role in taking digitization of payments even to villages.”
Rastogi added that “within six months of full launch, WhatsApp can easily reach 100m to 150m monthly transactions, which is a similar rate to what Google has seen here."