With more than 200 million Indians already using its messaging, WhatsApp is piloting a payment service that lets them transfer money to each other. The well-timed move has riled rivals, who say the Facebook Inc. unit hasn’t adhered to security requirements and doesn’t link to other digital wallets.
At stake is an Indian digital payment market that Credit Suisse Group AG estimates could be worth $1 trillion within five years and has homegrown and global players jostling for dominance. WhatsApp joins Google, Alibaba-backed Paytm, a unit of local e-commerce leader Flipkart and dozens of others already vying for customers as smartphone adoption surges. Mobile payments caught fire at the end of 2016 when the government’s demonetization temporarily took 86 percent of all paper currency out of circulation to tackle corruption.
ET Telecom reported that WhatsApp Pay opened to rave reviews and the potential impact of its established user base has drawn comparisons with the way WeChat reshaped payments in China when it expanded beyond messaging.
While it’s still in a test phase and available only to a fraction of its Indian users, WhatsApp Pay is compatible with the country’s Unified Payments Interface. The UPI is a digital payments system to facilitate real-time transactions, developed by the multi-bank umbrella body National Payments Corp. of India. A full rollout of WhatsApp Pay could come to all users as early as April.
WhatsApp’s pilot program is designed to work out teething problems and get user feedback, with the initial product being launched with ICICI Bank Ltd., India’s second-largest private sector lender. Any full rollout of the payments product would include all the features set out in the NPCI guidelines, ICICI said to ET Telecom.
The reception from rivals has varied from optimism that the overall market will grow to outright hostility at the newcomer. Critics have questioned the speed at which the NPCI permitted the pilot program without ensuring it fulfilled requirements such as a log-in and compatibility with other digital wallets.
