WhatsApp, the Facebook-owned messaging app that counts more than 200 million monthly users, has launched a payments feature in India during the past several months which now has around a million users.
According to a report in Quartz citing sources, WhatsApp is in the process of fixing any issues with the payment feature and adding more functionality during beta testing of the service, which kicked off in February. The payment service is based on the Unified Payments Interface of the National Payments Corporation of India. By using that, WhatsApp eliminates the step of requiring a customer to load up a digital wallet. With its service, users can make payments directly from their bank accounts via a virtual ID, noted the report.
The move to launch a payment app in India makes sense, given Credit Suisse predicts it will be a $1 trillion market by 2023, reported Quartz. WhatsApp has been slow in launching its payment app in the country because it first needed the nod from the government — and then in April compliance requirements changed, with the Reserve Bank of India issuing new guidance for payment companies to store data locally, noted the report. In April, WhatsApp also placed an ad for a head of India, which the report noted was an additional sign that WhatsApp wanted to expand in India — including into the payments market.
For the Indian payments market, WhatsApp’s entrance could hurt the existing players’ ability to make a profit, given that UPI eliminates the need for wallets and is thus hurting that side of the business. WhatsApp also has a large user base in India, and by launching the payments feature, it can lock them into the app, noted the report. WhatsApp's push into India has prompted some of the payment companies to respond. Quartz pointed to Paytm, which in November added a messaging feature to its app to better compete against WhatsApp. After WhatsApp started testing payments, Vijay Shekhar Sharma, the founder of Paytm, turned to Twitter to complain that WhatsApp is trying to monopolize the digital payments market in India, noted the report.