WhatsApp on Friday said it is rolling out its payments services in India after receiving a nod from the National Payments Corporation of India (NPCI). WhatsApp said it is working with five banks in India - ICICI Bank, HDFC Bank, Axis Bank, the State Bank of India, and Jio Payments Bank - and people can send money on WhatsApp to anyone using a UPI supported app. The payments service will be available in 10 Indian language versions of WhatsApp.
In order to send money, one needs to have a bank account and debit card in India. To begin with, WhatsApp can only extend the service to 20 million users in India (as opposed to the 400 million users it has in India).
“WhatsApp sends instructions to banks, also known as payment service providers, that initiate the transfer of money via UPI between sender and receiver bank accounts,” WhatsApp said on Friday.
In order to set it up, you can click on the payments option in the attachments tab (the paperclip button) of your chat, from where you would previously send photos, videos, documents etc. It will then take you to the registration page, give the requisite permissions, add your bank account and complete registration. You also need an UPI passcode but if you already have an account in an existing UPI app, the same code can be used. Both parties need to have this enabled, after which they can send and receive money. Like for all UPI, WhatsApp Pay will also have a limit of Rs 1 lakh.
Just like in other UPI apps, WhatsApp pay gives you the option to request money. Click on the attachments tab, go to payments, and while the default option opens to pay, you can click on the tab that says ‘request’ and key in the amount. This sends them a payment request, which expires in six days.
Some recipients do not have WhatsApp Payments enabled. If you wish to send money to them, you can key in their UPI ID which they may have created on an app such as BHIM, Google Pay, PhonePe etc.
This service can only be used on Indian numbers linked to Indian bank accounts. There will also be no fee to use the service.
"There is no fee... because its WhatsApp, you know its secure and private too. With UPI, India has created something truly special and is opening up a world of opportunities for micro and small businesses that's the backbone of the Indian economy," Facebook CEO Mark Zuckerberg said in a video message.
In 2018, the Facebook-owned company had started testing its UPI-based payments service in India, which allows users to utilise the messaging platform to send and receive money. The testing was limited to about a million users as it waited for regulatory approvals to come in.
On Thursday, NPCI - which runs the Unified Payments Interface (UPI) used for real-time payments between peers or at merchants' end while making purchases - allowed WhatsApp to start its payments service in the country in a "graded" manner, starting with a maximum registered user base of 20 million in UPI.
"Starting today, people across India will be able to send money through WhatsApp. This secure payments experience makes transferring money just as easy as sending a message. People can safely send money to a family member or share the cost of goods from a distance without having to exchange cash in person or going to a local bank," WhatsApp said in a blogpost.
It added that the payments feature has been designed in partnership with NPCI using UPI, an India-first, real-time payment system that enables transactions with over 160 supported banks.
In India, WhatsApp - which counts India as its biggest market with over 400 million users - will compete with players like Paytm, Google Pay, Walmart-owned PhonePe and Amazon Pay.
"Payments (service) on WhatsApp is now available for people on the latest version of the iPhone and Android app... We're excited to join India's campaign to increase the ease and use of digital payments, which is helping expand financial inclusion in India," it said, adding that users will need to have a bank account and debit card in India to send money through the platform in India.
"In the long run, we believe the combination of WhatsApp and UPI's unique architecture can help local organisations address some of the key challenges of our time, including increasing rural participation in the digital economy and delivering financial services to those who have never had access before," it added.
WhatsApp noted that its payments service is designed with a strong set of security and privacy principles, including entering a personal UPI PIN for each payment.
Interestingly, the approval for WhatsApp came on the same day as NPCI limited a single third party like WhatsApp or its rivals like Google Pay or Walmart's PhonePe to handle only 30% of overall UPI transaction volumes by putting a cap. This is expected to allay fears of potential monopolisation.
Recently, PhonePe had announced crossing the 250 million registered user milestone and over 100 million monthly active users (MAU), and had 835 million UPI transactions in October with a market-leading share of over 40%.
Google had 67 million monthly active users in September last year, and on the merchant side, it had over three million active merchant's data for June 2020. Google Pay has not shared any updated stats since September 2019.
UPI processed over 2.07 billion transactions in October (worth Rs 3.86 lakh crore), up from over 1.8 billion in the previous month, as per data from NPCI.
With PTI inputs