WhatsApp’s Entry into the Payments Domain Could be a Game-Changer

After a long waiting period, messaging giant WhatsApp has finally rolled out a beta version of WhatsApp Pay, its payment service. However, not many people know that it was its second attempt at entering into the payments arena in India.

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Last year, WhatsApp tried to join hands with a private bank to launch a mobile wallet service on its platform. However, it didn’t sit well with the central bank RBI which said that it wasn’t going to let a foreign company venture into the Indian payment network.

According to RBI guidelines for mobile wallets, Non-bank entities applying for authorization have to be based in India and registered under the Companies Act 1956 / Companies Act 2013. Since, WhatsApp is a subsidiary company of Facebook, which itself is based in the US, it didn’t meet the requirements.

This time, WhatsApp has been successful in its endeavor and has launched a digital payments service with the help of Unified Payments Interface (UPI). But is that a really big deal when there are many other similar platforms available including Google’s own Tez? The answer is “yes”!

Why is WhatsApp Pay so Important?

There are several consumer payment apps available on the Internet. However, WhatsApp is bound to have a huge impact on the industry in India just on the basis of sheer numbers. For instance, Google Tez has 13 million users, Bhim only 25 million. However, WhatsApp has a whopping 250 million users.

WhatsApp is already used by a large number of people in India. And to use its payment feature they won’t need to install any other application. So, it’s highly convenient and easily accessible.

Since WhatsApp Pay is based on UPI, which is owned by the government, it will also play a big role in its popularity. It’s rival Paytm is likely to face a strong competition once the service is launched in full-fledged format.