WhatsApp Gets NPCI Nod To Expand Payments Service To 100 Mn Users

Messaging platform, WhatsApp, has received National Payments Corporation of India (NPCI) nod for extending the UPI service to an additional 60 Mn users.With this, as many as 100 Mn WhatApp will now be able to use UPI payments on the platform.

In a press statement, it said, “NPCI has approved an additional 60 Mn users on UPI for WhatsApp. With this approval, WhatsApp will be able to expand the service to its 100 Mn users.”

The move will come as a huge relief for WhatsApp which has been seeking removal of a cap on the number of users it can roll out the service to. The relaxation, although huge, could stil limit WhatsApp’s growth as the platform has more than 487 Mn users in the country.

NPCI has been gradually reducing the cap on WhatsApp over the years. The Corporation had, in 2020, given its nod to the social media platform to launch its payments service. Back then, it had allowed WhatsApp to onboard 20 Mn users and then gradually increased the number to 40 Mn in November last year.

India is WhatsApp’s biggest market and the Meta-owned platform has time and again sought to remove any cap on the number of users. WhatsApp began its work on the service as early as 2017 and ran pilots in the country in early 2018. But, has since spent a greater part of the duration focused on complying with local regulations, just so it could reach out to more Indian users.

NPCI, on the other hand, has good reason to restrain the platform and stop it from undermining competition and creating a monopoly. With a huge reach, apprehensions have been raised about its enormous power and with this idea in mind, NPCI has been careful about its approach to WhatsApp.

The overreach is also part of the government’s bid to reign in controlling market players in the critically important financial sector. In addition, the Centre has also implemented the Third Party Application Providers (TPAP) guidelines to discourage monopoly and duopolies in the payment app segment by limiting the market cap to 30% per player.

It is these same guidelines under which WhatsApp has been disallowed from leveraging its payments platform to more than 487 Mn users (as per data available at the end of 2021) in the country. 

WhatsApp competes with other major players such as Paytm, Google Pay, PhonePe, among others.While PhonePe claims to have more than 350 Mn users in the country, Alphabet-owned Google Pay has more than 200 Mn users in India. Additionally, Paytm also claimed that it had more than 69.5 Mn average monthly transacting users in Q4 FY22.

WhatsApp aims to enter the crowded digital payments market, which could help it gain a major heft as a payments platform. Data from the government reveal that a record 8,193 Cr digital payments transactions were processed in FY22 till March 20 this year. Additionally, UPI payments worth INR 81 Lakhs Cr were made in FY22 till March 20, 2022.

In terms of share, PhonePe led the UPI numbers with INR 47.14 Lakh Cr worth of transactions in March of 2022. Google Pay came a distant second with INR 3.39 Lakh Cr worth of UPI transactions. Together, the two commanded a little over 84% of the total UPI market in March, 2022. They were followed by Paytm with transactions worth INR 95,650 Cr and Amazon Pay with transactions worth INR 6,895 Cr in its kitty.

The adoption of online payments has mostly been fueled by pandemic-growth. Aversion to cash, caused by a general belief that they were carriers of coronavirus, led to an online payments boom. The ease and simplicity of these platforms have also contributed in a big way to the success of digital payments.