After attaining the go-ahead from the Unified Payments Corporation of India (UPI), WhatsApp rolled out the payment services for 20 million users in India. WhatsApp also announced that it has teamed up with numerous banks like SBI, HDFC, Axis Bank, and ICICI for digital payments in India. As mentioned by the Facebook-owned messaging system, SBI caters to more than 45 crore customers in India. Also, with more than 120 million UPI users, SBI also commands a 28% market share as a Remitter Bank, which is highest in the ecosystem.
When was WhattsApp Pay introduced?
WhatsApp Pay is an in-chat payment feature that helps the users in making transactions to their contacts in WhatsApp. This is a UPI-based payment service that allows the users to both sending and receiving money. This is developed by the National Payments Corporation of India.
Initially, WhatsApp Pay was launched in February 2018. That was a trial run. ICICI Bank partnered with WhatsApp as a medium to transfer payments to a million users. On February 7th, 2020, WhatsApp received clearance from NPCI to roll out the digital payment feature in phases. In the first phase, WhatsApp rolled out the payment services to 10 million users in the country.
How to use WhatsApp Pay?
For using WhatsApp Pay, the users need to send a request to the contact. When they receive the request, the contact can set up the UPI account on WhatsApp. You can send the money directly from the chat. Tap on the “share file” icon and select the “payment” option. The payment option is also available on the shortcut menu.
You can check the transaction history and account details in that section also. The payment system works based on the Unified Payments Interface method, where the fund transfers are initiated without offering bank account numbers and IFSC codes. WhatsApp Pay users can also enter the UPI ID and send money through the QR code. WhatsApp users can send money to people that are not on their contact list as well.
Requirements and key objectives of WhatsApp Pay
To send money using WhatsApp Pay, it is mandatory to have a bank account and a debit card in India. WhatsApp will send instructions to the banks, which are the payment service providers. The banks start the transfer of money through UPI between the sender and the receiver.
In the long run, we believe that the combination of WhatsApp and UPI’s unique architecture will help the local organizations to address some of the major challenges. This will also include rural participation in the digital economy. Also, it can offer financial services to those who have never had access to digital payments before.
According to Facebook CEO Mark Zuckerberg, WhatsApp payments were possible because of the UPI systems and 140 banks. All of these made things easy. During a chat with Reliance Chairman Mukhesh Ambani, Mark Zuckerberg said, “We just launched WhatsApp payments in India last month — now you can send money to your friends and family through WhatsApp, as easily as sending a message. That was possible because of the UPI system that has been built in India.”
Similar to every feature in WhatsApp, the payments system is designed keeping in mind privacy and security. Along with entering a personal UPI PIN for every transaction, WhatsApp Pay is available for users of the latest version of Android and iOS.
What are the controversies related to WhatsApp Pay?
There have been allegations that the payment system might not be a secure option. However, WhatsApp refuted the allegation in the Supreme Court. The allegations originated from a controversy last year. There was a breach of privacy and financial data security. Indian journalists and human rights activists claimed that they were among the ones globally spied upon by unnamed entities.
A serious allegation was submitted against WhatsApp that it can be hacked. While WhatsApp denied the allegations and mentioned that they were absolutely baseless. There was no such pleading and it is just an oral submission across the bar without any basis.
According to senior advocate, Krishnan Venugopal, the problem with WhatsApp, Google and Amazon is they allow payment to happen but the data goes abroad. Companies can access important financial data and RBI justifies it. This is a violation of privacy judgment because the data is grossly misused.
It also offers the opportunity to the companies to collect data and use it for advertisement purposes as well. However, WhatsApp has mentioned that they don’t track the exact location of the users but they do note the IP address for verification purposes.
According to Abhijit Bose, Head of WhatsApp, India, “We’re excited and privileged to partner with State Bank of India, ICICI Bank, HDFC Bank, and Axis Bank to bring simple and secure digital payments to WhatsApp users across India. UPI is a transformative service and we jointly have the opportunity to bring the benefits of our digital economy and financial inclusion to a large number of users who have not had full access to them before.”
Closing statement
Whether the WhatsApp Pay feature will prove to be a secure and safe option or not, is debatable. Even though WhatsApp claims that the payment method is safe for the users, we will have to wait for some time to see how it works out throughout the people of India. Nevertheless, when people access financial tools they are empowered to support themselves and others to start a business. Thus, in the long run, these innovations are important to offer people more control over their money. Making payments easier is a small step that can help.
