By 2023, money transferred digitally in India per annum will be somewhere around $1 trillion. This basically means that India has already entered the digital realm and a large majority of people like to use these digital modes for money transfer. Paytm was the first platform in India that really gained traction and a lot of people use it as their primary money transfer application. Aside from Paytm, PhonePe, Google Pay, MobiKwik, and Bhim UPI are some of the prominent digital money transfer platforms.
UPI was developed by the Indian government and stands for Unified Payments Interface. Using this service, a lot of companies have started making use of digital transactions. To compete with all these service providers, Facebook is going to introduce its Whatsapp Pay service in India. Facebook has seen the potential of digital transactions in India and to increase its business in India, they have decided to launch Whatsapp Pay. As a matter of fact, Hike Messenger has already integrated UPI into its user interface. This basically allows two Hike users to transfer money to each other’s bank account straight from Hike Messenger Application. Whatsapp Pay is also expected to do something like this.
After Facebook Whatsapp merger, Facebook wrote a letter to RBI proposing the idea. As a matter of fact, the testing has already begun and 1 million Whatsapp users already have UPI integrated into their application. The main benefit of UPI is that you don’t have to keep multiple applications on your smartphone. All you need is one application that has UPI functionality and connects your bank account with it. Almost all Indian banks make use of UPI.
Most of the people that use a smartphone with internet connectivity also use Whatsapp. But, it is not necessary that a person that uses Whatsapp will also have an application like Paytm or PhonePe. The benefit of Whatsapp is that it will bring more people in the digital transaction circle. Whatsapp already has the infrastructure in India with around 300 million users. The digital payment app Paytm is on the top with 230 million users.
The service was set to launch in July but due to some regulatory issues, the release was delayed. Now with the regulatory issues out of the way, Whatsapp has begun the trial of the application. It is anticipated that a large number of MSMEs will benefit greatly after the full version of Whatsapp Pay is made available for download publically.
Whatsapp Pay is gunning for the top spot which is currently held by Paytm. There are around 300 million Whatsapp users in India and if all of them start using the service from the get-go, Whatsapp will become the market leader. However, it is easier said than done. Whatsapp is yet to comply with the data localization norms of Reserve Bank of India.
Whatsapp Pay will give India’s digital economy the much-needed push. Also, it is anticipated that this could be one of the major changes in India’s e-payments history. WeChat Pay has launched in China a while ago and it has been doing pretty good there. The same is expected from Whatsapp Pay in India.