There are 7.8 billion people in the world right now of which 2 billion people are actively using WhatsApp. Can you imagine the scope of a digital payment channel that already holds almost one fourth of the world as active users?
Damn, good work WhatsApp!
But wait, let’s back it up a bit.
What is WhatsApp Pay?
WhatsApp Pay is a feature rolled out to provide an in-chat payment option to users of the application to go through with transactions with people on their contact list (while this is not a restriction, it is just a facilitator of simplifying the process).
The service is UPI- based and allows you to receive and send money by simply tapping on the ‘attachment’ icon and selecting the payment option. There is no fee attached for consumers but merchants are subjected to a 3.99% transaction cost.
Also Read: The Whats, What Ifs and Hows of WhatsApp Pay
Why Is WhatsApp Pay In The News Again?
WhatsApp recently tapped into its second largest market, Brazil. But a week after its roll out, it faced a staggering pause as Brazil’s Central Bank suspended the feature. The official statement states that this decision was taken as a measure to ensure a health market competition in the digital payment sector. The time at hand due to this suspension will be used to further analyse and evaluate whether WhatsApp abides by the regulations of the payment infrastructure.
In response to this setback, WhatsApp stated that it will continue to work with both – the local partners and the Central bank to find common ground and make it work to stabilize the e-pay market for itself.
Wait, Hadn’t it already launched in India?
We all heard about transactions over WhatsApp, a couple of years ago. But it most definitely wasn’t an official nationwide feature – A Beta version of WhatsApp Pay was launched in India back in 2018 following the technique of sample testing. Being the first country to have these trials, it was popularly assumed that India would be the first to be officiated in terms of setting an example but well, Brazil made the list first (almost!).
India has one of the biggest retail markets with a kirana shop or a paan-beedi shop or a tapri at literally every crossroad across the country. India in itself offers a user base of 400 million for taking this feature ahead and reaching its full capacity. One would assume that India is certainly the best pick for a launch of a digital payment system.
So, what went wrong?
With anything remotely related to online payments and banking, the first concern is security.Facebook owned, WhatsApp Pay didn’t fall in line with the guidelines put out by NPCI (National Payment Corporation of India) and RBI (Reserve Bank of India). This was a stumbling point as it consistently defaulted to reach those standards. Furthermore, there is a common sentiment of high risk when one application that is used as widely as WhatsApp caters to two different services, each of which have their own terms and conditions when we talk about privacy.
What Does the Future of Digital Payments Look Like?
Only last week, WhatsApp received clearance in terms of aligning with the country’s data localisation norms. This process was silently ongoing for the last two years and the timing, I have to say, has been exceptional. With a blow out in Brazil, India with its massive market is a light at the end of the tunnel for WhatsApp.
India is already a forefront of major players in the digital payment sector – Google Pay (75 million transacting users), PhonePe (60 million transacting users) and Paytm (3o million transacting users). This creates a competitive advantage for WhatsApp purely on the basis of its existing user base.
It is evident that Mark Zuckerberg has big plans that are panning out in phases across the multiple platforms under his wing. With Facebook Shops and Instagram Shops, the immense response has made the two platforms a huge breakthrough in the e-commerce world. With WhatsApp Pay acting as a facilitator to the process, I can already see a monopoly in the market – not by one brand/company but by one person. Let’s not forget, Facebook invested $5.7 billion in Reliance Jio platformes, which was nothing short of a strategic move timed with the roll out of the WhatsApp e-pay service.
A lot is riding on when and IF WhatsApp Pay will have an official and successful rollout in the coming years. We’ll have to wait and see.
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