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Has Facebook Finally Launched WhatsApp Pay in India

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According to a recent news report, WhatsApp Pay has been given regulatory approval by the NPCI. Read on to know more about it…

According to a recent news report, WhatsApp Pay has been given regulatory approval by the National Payments Corporation of India (NPCI) to expand its pilot United Payment Interface (UPI) services to 10 million users in India. In the first phase of rollout — Facebook owned WhatsApp will cater to 10 million users in India. Once WhatsApp is able to do a full roll-out of the payment service, it is expected to capture the lion’s share in that space.

WhatsApp’s payment feature, known as WhatsApp Pay, is designed to run on UPI — developed by the NPCI  which allows users to pay others or do business transactions through their bank accounts.

It’s been close to couple of years after WhatsApp Pay was brought out as a pilot project. The NPCI approval follows the Reserve Bank of India (RBI) gave a go-ahead to Facebook. WhatsApp has assured the RBI and NPCI that it will comply with the data localisation norms.

The delay in approval of WhatsApp Pay service was due to Facebook’s resistance to the government’s stand on data localisation.

Phased Rollout
It is due to the large user base of WhatsApp users in India that its payment service is expected to be in a phased rollout. It is reported that Facebook wants to scale up its payments operations once the infrastructure is equipped to handle the large load of transactions. Facebook also claims that WhatsApp being developed on the Unified Payments Interface (UPI) standard, is different from other apps that offer payment services. Technically speaking — UPI, developed by NPCI, lets bank account holders send or receive money electronically without entering their net banking user ID or password.

In the case of WhatsApp, the user base is already large and a phased rollout will help ensure banks can scale up their systems as users start transacting.

Competition
Till now, Google Pay launched in 2017 as Tez has been the most used and growing UPI app in India, followed by Walmart-owned PhonePe, Paytm and NPCI-created BHIM. All or most of these apps have acquired users from the ground up, giving banks time and opportunity to scale up as the transaction volume rises. As for Paytm, the subscriber numbers were not as high as WhatsApp when it launched UPI. Paytm had about 280 wallet users at the time and not all of them switched to UPI.

The move to roll out WhatsApp Pay to a wider user base will put other American social media companies in direct competition with players like Alphabet’s Google Pay, Walmart-owned PhonePe, Amazon Pay and Alibaba-backed Paytm. These companies are already locked in a fierce battle to dominate the digital payments space in India.

Beta Launch
Earlier, WhatsApp started its trial run by partnering with ICICI Bank, while awaiting the regulatory nod to go into actual launch in India. After a long time, things started firming up late last year. In October 2019, a third-party security audit, okayed by the RBI, was performed by one of the Big Four consultancies to check for security compliance of WhatsApp Pay, it’s learnt. In the meantime, WhatsApp worked with the government and its own teams to resolve issues around data processing compliance.

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