WhatsApp Pay was on the beta testing phase for the last two years. The parent company, Facebook, was struggling to launch the payment gateway in India. Finally, the Facebook-owned messaging platform will launch its payment option.
WhatsApp payment gateway will be launched in collaboration with three renowned private banks in India. The final reports suggest that it will be available for Indian people by the end of May.
What are the banks in collaboration with WhatsApp?
At present, the organization has collaborated with the top three banks of India. These are ICICI bank, HDFC, and Axis bank. There are talks to include the State Bank of India too. However, it will not be included now. The State Bank of India will be included later on.
All four banks were a part of the beta testing phase and integration process.
According to the statement by a WhatsApp spokesperson, “We are continuing to work with the government so that we can provide access to payments on WhatsApp to all of our users. Payments on WhatsApp will help accelerate digital payments and this is particularly important during Covid19 as it is a safer way to transact for our 400 million users in India.”
Image Source
Presently, both SBI and WhatsApp are working closely for integration testing. There are some outstanding insights into the CERT-In Audit report presented by WhatsApp. Thus, they have asked for time till May 31st, 2020.
What caused the delay of two years?
WhatsApp received the clearance from the National Payments Corporation of India quite a long time ago (two years to be specific). However, there was a delay in granting approval by NPCI. The delay was mainly due to the company facing numerous legal and regulatory issues.
Also, the issue of data localization guidelines presented by the Reserve Bank of India in 2018 resulted in the delay. WhatsApp e-commerce payment gateway services were available for the users of India since February 2018. The services were available for selected users.
Now, the services will become available to all the users of WhatsApp. To activate the service, you have to initiate a payment for generating a UPI code. As a part of the beta testing, initially, 1 million users of India had access to the WhatsApp Pay feature.
The government and RBI were reluctant on the approval because of the vulnerabilities discovered on WhatsApp. An NGO Center for Accountability and Systemic Change filed a petition to the Supreme Court of India. The petition claimed that WhatsApp doesn’t comply with the data localization norms set by the RBI.
According to the petition, “one million Indians cannot be reduced to guinea pigs. Their sensitive personal data, including financial data, cannot be stored outside India in contravention to the RBI circular.” Due to this petition causing security issues related to WhatsApp, the initial plan of launching the payment gateway was held up.
A multibank model for seamless e-commerce transactions
For a major digital platform like WhatsApp to offer a UPI-based service, it needs to opt for a multi-bank model. This is a mandatory notice issued by the NPCI recently.
The multi-bank model will avoid any sort of delay in transactions in case any bank faces issues in transactions. Also, a single bank’s server will not be under excessive pressure. The disadvantages of choosing a single-bank model were seen when Yes Bank stopped the transactions from different platforms like Swiggy and PhonePe.
Image Source
Google Pay and Truecaller are the two major platforms that allow multi-bank transactions at present. Google Pay already has HDFC, Axis Bank, SBI, and ICICI for enabling the UPI based transactions. WhatsApp Pay is going to enter into a head-on competition against Google Pay, Amazon Pay UPI, PayTm, and PhonePe.
Why India as a target market?
The primary reason to choose to launch the payment gateway in India is that WhatsApp has 400 million users in India. Among the 2 billion users worldwide, the major user base is in India. With such a significant number of users, India is the largest target market for the app.
For this particular reason, the WhatsApp payment gateway is speculated to be a hit among the users. Also, because of such a huge number of users, it can give a tough competition to the existing UPI payment gateways.
Facebook has plans to launch WhatsApp payment services in other countries as well. CEO Mark Zuckerberg mentioned that the company is looking forward to rolling out the payment gateway service in multiple countries. This is going to happen in the next six months.
Last month, Facebook entered into a collaboration with Reliance enabling e-commerce operations through WhatsApp, known as JioMart. Now, JioMart is going to make things easier for the WhatsApp payment gateway.
JioMart is going to widen the use of WhatsApp Pay. The small business owners, e-commerce, and other consumers using JioMart will prefer WhatsApp payment services to make a payment.
Is it going to be the new killer feature for WhatsApp? What do you think? Share your thoughts with Skyram here.
For more informative blogs on and latest updates, check our blog here.
