WhatsApp could launch its much-awaited payments feature as early as next month as per people close to the development. An ET report stated that the messaging app is at various stages of integrating its Unified Payments Interface (UPI) based digital payments platform with SBI, ICICI Bank, HDFC Bank, and Axis Bank.
“The platform is already in beta stage (testing) with one of its partner banks. We expect the product to go live for consumers by the end of February, depending on how the trials work out,” one of the persons said.
The messaging app is also involved in security checks to ensure safety of the data. The final step in the integration process, following security checks, involves testing the product among select users before it goes live.
As per another source, “To be able to send money as easily as a text message involves ensuring various levels of encryption to keep the data safe. UPI, by itself, also has a complicated settlement mechanism between various banking partners. These issues need to be attended to before the product goes live.”
WhatsApp will act as a top layer that will identify the sender and the recipient in the back-end. As its digital payments platform will be integrated with banks, it will also identify the bank account of the customers. UPI will finally be used to settle the transactions.
A Quick Look At WhatsApp And Digital Payments In India
The Facebook-owned messaging company received the government’s approval to integrate with UPI last year. The instant messaging app had reportedly first approached the SBI and NPCI for enabling UPI payments on its digital wallet. Inc42 had reported in April 2017 that it was looking to enter the payments space in India.
Thus WhatsApp will join other global giants such as Google which launched its Tez app last year to make a go for the payments market in India. There are other rivals as well. Besides the formidable incumbent Paytm, there is homegrown unicorn, Hike Messenger which jumped the gun and launched a UPI-enabled digital wallet – Hike Wallet – months ahead of the proposed launch of WhatsApp’s digital wallet in India in June last year.
UPI, which reported 145 Mn transactions in December, has emerged as one of the fastest-growing instrument for digital payments on account of the strong adoption of Google Tez, Paytm and Flipkart’s PhonePe. While Tez and PhonePe have crossed 10 Mn downloads each on Google Play Store, Paytm has also clocked over 100 Mn downloads.
All these platforms are incentivising users to transact on their UPI platforms. Hike that went live on UPI in June reported 10 Mn financial transactions in November on a 100% month-on-month growth. Hike meanwhile has clocked more than 10 Mn downloads on Google Play Store. Flipkart-owned PhonePe, on the other hand, hit 33 Mn transactions in November last year.
No wonder ,WhatsApp’s payments feature is highly anticipated because of the huge popularity of the app in India. Currently, WhatsApp, which has crossed 1 Bn downloads globally, has more than 200 Mn monthly active users in India. Thus it will add a stronger volume to UPI payments as well as bolster the digital payments ecosystem in India. Poised to reach $500 Bn by 2020 according to a report by Google and Boston Consulting Group, the digital payments segment in India is growing by leaps and bounds. 2017 also ended on a high note for the Indian digital payments industry, with digital transactions reaching a new peak of 1.06 Bn in December.
[The development was reported by ET]