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WhatsApp May Take Cashback Route To Popularise Its Payment Feature In India

WhatsApp May Take Cashback Route To Popularise Its Payment Feature In India

To augment the growth of its payment feature in India, WhatsApp is reportedly launching a cashback feature on its platform, according to reports

According to the National Payments Council of India (NPCI), 3.5 Bn transactions worth INR 6.39 Lakh Cr were recorded in August 2021 where Whatsapp share was less than 1%

As WhatsApp Payments eyes a market share in the growing UPI market in India, the cashback feature may only be available for users in the country

According to a report by the National Payments Council of India (NPCI), 3.5 Bn transactions worth INR 6.39 Lakh Cr were recorded in August 2021. With PhonePe, Google Pay, Paytm and CRED leading the segment with a combined share of 96%, the WhatsApp Payments feature saw less than 1% transactions, despite being the widely-used messaging platform.

To augment the growth of its payment feature in India, Facebook-owned WhatsApp is reportedly launching a cashback feature on its platform. According to WABetaInfo, an independent portal that tracks WhatsApp updates, the Facebook-owned instant messaging network, will introduce a feature on UPI payments done using WhatsApp where users can receive cashback, 48 hours after they have made a payment.

Rival Google Pay, PhonePe, and even digital payments giant Paytm offer multiple cashback and reward schemes on their platforms, attracting users to their UPI payments for all their transactions. According to the report, as WhatsApp Payments eyes a market share in the growing UPI market in India, the cashback feature may only be available for users in India, and its success will determine launch in the Brazilian market.

The report, with a screenshot, further added that the update is under development and thus, will not be available for every user; it is also not clear if everyone will be able to get the cashback or only users that have never sent a payment on WhatsApp.

Notably, the report stated that users will only get cashback of up to INR 10 as limited for UPI Payments in India, but there is a possibility for change before the official release of the feature.

Currently, in the rewards scenario in India, Google Pay offers cashback upto INR 10, mostly focussing on coupons in partnership with various brands via scratch cards on payments above INR 150. The system is also based on a “milestone” feature where users are rewarded only after a specific number of transactions.

Similarly, Paytm also offer scratch cards after payments, which can be Paytm First points, gamified stickers, coupons or cashback upto INR 10. PhonePe, on the other hand, offers interchangeable scratch cards.

A Tumultuous Digital Payments and UPI Scenario In India

Started in 2016, UPI has had a tumultuous acceptance in the Indian market. It witnessed its biggest dip in April last year, wherein transaction volume dipped to 990 Mn and transaction value dropped to INR 1.51 L Cr. This drop was due to covid lockdowns and restrictions on travel, dining out, ecommerce and offline transactions. After the ease of restrictions, UPI transactions surpassed the 2 Bn mark and went on the path of recovery in October 2020 — quite similar to the trend in June and July this year.

In June 2021, UPI crossed 2.8 Bn transactions worth INR 5.47 Lakh Cr and in July, it recorded 3.2 Bn transactions worth INR 6.06 Lakh Cr, up 10.8% month-on-month.

Not just UPI, the Reserve Bank of India (RBI) monitors the growth in digital transactions with its digital payments index DPI). DPI was created in 2018 to monitor the extent of digital payments growth in the country. In March 2021, the index grew to 270.59 from 207.84 from the same period last year.

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