Facebook Inc., which had been fighting for years to get permission to operate its WhatsApp payments service in India, has finally received approval, capping off a historic year for the tech giant, which also saw it, partner, with billionaire Mukesh Ambani to expand in the world’s largest open technology market.
WhatsApp Pay, according to its operator, the National Payments Corporation of India, can go live utilising the homegrown, multibank Unified Payments Interface. Starting with as little as 20 million members, the social media behemoth may gradually build its UPI base. Since early 2018, Facebook has been testing WhatsApp payments in India.
The clearance is the latest step for the billionaire Mark Zuckerberg-led company, which in April agreed to pay $5.7 billion for a 9.99 per cent share in Mr Ambani’s digital services unit, Jio Platforms Ltd. Mr Ambani’s company has received more than $20 billion in funding from investors such as Intel Corp. and Google, as global IT behemoths doubled down on teaming with Asia’s richest man and India’s most powerful corporate leader.
“You may now transfer money to your friends and family as easy as you can send a text message. There is no charge, and it is backed by over 140 banks “In a video, Mr Zuckerberg remarked. He went on to say that it was available in ten Indian regional language WhatsApp versions.
a crowded marketplace
Facebook has made no secret of its desire to establish a significant commercial operation in India, with WhatsApp chatting at its core. Local pioneer Paytm, Google Pay, Walmart Inc.’s PhonePe, Amazon.com Inc.’s Amazon Pay, and dozens of other startups compete in India’s payments sector, but WhatsApp’s massive user base of more than 400 million gives it a distinct advantage in a market expected to rise to $1 trillion by 2023.
“People across India will be able to send money over WhatsApp starting today,” the business said in a blog post on its website on November 6. “We’re thrilled to be a part of India’s push to improve the convenience and use of digital payments, which is assisting in the country’s financial inclusion.”
Because of the widespread use of its messaging software, WhatsApp will be able to easily add subscribers to its payments service, unlike some of its competitors. WhatsApp is used by almost every other mobile Internet user. India is Facebook and WhatsApp’s largest market, at a time when the American company is seeking fresh ways to grow as more lucrative countries such as the United States and Europe become saturated.
Meanwhile, Mr Ambani has shifted his focus from the energy sector he inherited in 2002 to technology and e-commerce as pillars of expansion for his publicly traded Reliance Industries Ltd. — which controls the digital and retail units. Mr Ambani is leading Reliance’s transition, which includes making Facebook and WhatsApp a key part of the company’s future plans, particularly as the billionaire looks to compete with Amazon and Walmart Inc.’s Flipkart in e-commerce.
WhatsApp is now available for download.
Long before the partnership with Mr Ambani, Facebook was working on a payment system for WhatsApp. The programme, which had been in a million-user test mode for over three years, was thought to be on the verge of getting approval for its payments service in February.
Nonetheless, several of Facebook’s prior business endeavours in India have been restricted, including a programme that provided free internet access to a limited number of websites.
WhatsApp has recently added commerce tools, such as product catalogues and stores, to allow small businesses to promote and sell their products directly through the service. Payments are an important aspect of making those transactions possible. The company also hopes to utilise these product catalogues as a gateway to other Facebook services, such as advertising and customer care capabilities, for small businesses.
Monopoly Avoidance
To prevent a single firm from monopolising the industry, India’s National Payments Corporation has put a 30% volume cap on all third-party payment providers on its payments network. Existing payment operators have two years from January 1 to comply with the limit, according to a second statement released by the government organisation on Thursday.
WhatsApp, according to Facebook executives, would serve as a one-stop-shop for Indian small companies, allowing them to sell goods and engage with customers on a platform that already has hundreds of millions of users. They intend to emulate that strategy in other markets, such as Brazil, though efforts to introduce payments to that country have run into legislative hurdles.
“In the long run, we believe the combination of WhatsApp and UPI’s unique architecture can help local organisations address some of our time’s most pressing challenges, such as increasing rural participation in the digital economy and delivering financial services to those who have never had access before,” the company said in a statement.