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WhatsApp Payments - A Sleeping Giant?


WhatsApp Pay unrolled its payments services in India, which counts as its biggest market with over 400 million users, after receiving nod from the National Payments Corporation of India (NPCI).

After launch, the Facebook-owned company said that its payments feature has been designed in partnership with NPCI using UPI, an India-first, real-time payment system that permits transactions with over 160 supported banks. With this, - will compete with players like Paytm, Google Pay, Walmart-owned PhonePe and Amazon Pay.

It started working with five banks in India - ICICI Bank, HDFC Bank, Axis Bank, the State Bank of India, and Jio Payments Bank and other people can send money on WhatsApp to anyone using a UPI supported app.

How it works?

To send money on WhatsApp within the country, it’s important to possess a bank account and debit card in India. The Facebook-owned messaging app will send instructions to banks, also called payment service providers, which will initiate the transfer of money via UPI between sender and receiver bank accounts.

With this, WhatsApp users can send money to anyone using a UPI supported app.

While using WhatsApp for payments, one has to enter a personal UPI PIN for each transaction.

About the new feature, WhatsApp had said, “This secure payment experience makes transferring money even as easy as sending a message. People can safely send money to a family and friends or share the price of the products from a distance without having to exchange cash in person or going to a local bank.” The feature was designed in partnership with the National Payments Corporation of India (NPCI) using the Unified Payment Interface (UPI), an India-first, a real-time payment system that permits transactions with over 160 supported banks.


  1. Controversies related to privacy policies: WhatsApp's latest privacy policy has hit it hard to scale up the payments business. Lack of trust from the consumer due to the privacy concerns are preventing its adoption by the masses.

  2. Regulations: WhatsApp Pay rollout had coincided with the NPCI announcement in November that third-party applications offering UPI payments service can process a maximum of 30 per cent of the transaction volumes starting January 1, 2021. The decision, according to an NPCI statement, was taken to “address the risks and protect the UPI ecosystem as it further scales up.” Moreover, NPCI had allowed WhatsApp to launch payments service in a graded manner to a maximum of 20 million registered users in UPI.

  3. Lack of Marketing: The payments section had a step-by-step launch without any big bang marketing campaign to announce its entry into payments space. Consumer awareness is very low, WhatsApp is still perceived as a basic communication tool and very limited people know about the payments business.

  4. Missed the bus: WhatsApp is still trailing way behind the UPI giants PhonPe (Walmart owned), Google Pay and Paytm despite having a huge user base which still use WhatsApp as a communication tool.

  5. No Cashbacks: Despite a large user base, those living in Tier-III cities and beyond are less likely to use WhatsApp for payments. That’s also because, unlike its large competitors, WhatsApp doesn’t offer cashback and other add-on services as incentives.

The War is not over yet

The future of digital payments in India is bright. The new modes of payment like Bharat QR, mobile wallets, USSD banking, AEPS along with credit, debit and prepaid cards targeted towards improving speed and efficiency of payments are enablers for a less cash economy. Out of these, UPI which has tokenized the Bank account, is emerging as a platform that could potentially transform payments. Over the last year, the number of UPI transactions grew over 40 times while value of transactions grew over 10 times.

WhatsApp owns the untapped massive penetration in the Indian markets through its which can play as a major disruption in the UPI space. Right marketing strategies, reclaiming the consumer trust can get WhatsApp back in the game and also signal a tectonic shift that might unlock a lot of disruptive value in the long term.

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