WhatsApp finally seems ready to launch its ‘WhatsApp Pay’ payment services after it received the Indian Government’s nod for go-live of WhatsApp Pay. It is planning to roll it out in a phased manner after being restricted to beta testing with among 1 million of its user base.
WhatsApp, the hugely popular messaging app, founded by Brian Acton and Jane Koum was acquired by the U.S social media giant Facebook in 2014. It has managed to keep its own identity and continues to attract masses to its platform due to its intuitive and user friendly interface. It now boasts about 400 million monthly active users and its move to leverage this huge user base might also impact existing UPI players like Google Pay,PhonePe and Paytm.
WhatsApp Pay launch was earlier delayed due to the data localization compliance norms not being met and the Pegasus hacking controversy (that affected Indian WhatsApp users too) also hit it hard. Now with a revised proposal that meets above data localization standards and sufficient traceability of messages, it’s ready to enter the payments market with a renewed vigour.
The National Payments Corporation of India (NPCI) pushing aggressively for a monthly 1 billion UPI transactions could only help its cause further. WhatsApp Pay could reap huge rewards of a UPI ready market and highly aware users.
In the era of constantly changing consumer spending behavior, UPI use seems to stay and keep increasing manifold. With India’s digital payments market set to explode to USD 1 trillion by year 2023, the competition to grab a bigger market share has never been more fierce.
At a time where the big players in this space continue to lose big money in their efforts to entice customers to transact digitally, WhatsApp entry could force some major traction in this space. Just to give you an estimation, the collective losses for Paytm, Amazon Pay, PhonePe and Google Pay stands at INR 8,311 cr.
The key factor which works in WhatsApp Pay’s favor is the single app use, wherein users never have to toggle between multiple apps for payments and chats. In effect the entire user experience becomes more seamless. Also the user penetration of WhatsApp is better in metros and tier 2 and 3 cities as well. The dirt cheap data plans have also helped.
The other biggies like Google Pay,Paytm and PhonePe are aware of the changing dynamics and are expected to bring in some incentives to try and keep users glued to their platforms. The phased roll-out will further arouse user interest and better planning by WhatsApp for an evolving market trends.