WhatsApp ventures into banking sector in India

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Facebook’s most popular messaging app is set to fully launch its Unified Process Interface (UPI)-based digital payments system in India this week, according to BloombergQuint’s.

The service has so far registered 1 million users out of the 200 million since the launch of its beta version that was released earlier on this year in February. The service has undergone several series of testing and reviews and is now set to be rolled out.

WhatsApp will partner with 4 banks to offer this service (3 for the start); that is with HDFC Bank, ICICI Bank and Axis Bank and State Bank of India which will join with time to come.

In fact, WhatsApp had promised that it will not fully launch out the digital payment system not until it had been tested in at least four banks. According same article on BloombergQuint, WhatsApp is rushing the launch following WeChat which has reshaped its payments in China.

Not only WeChat has put pressure on the giants, but WhatsApp comes into the digital wallet market of India with incumbents like Paytm, Google Tez, PhonePe that have fairly performed well there.

Paytm which is currently topping the digital payment industry in India is valued at US$10 billion, according to livemint and was recently recognized as India’s second most valuable start.

WhatsApp payment is a peer-to-peer payment feature that allows one to request, send or receive money. The system for now is based on India’s Unified Process Interface (UPI) that enables you to add your bank account to your WhatsApp through which you can send or receive money from other WhatsApp users.

The system is quite similar to familiar payment system (mobile money) we have in Uganda except for the fact that money transacted is directly sent to one’s bank account not their phone number. Therefore, the float is kept in bank accounts not one’s mobile money account.

In simple terms, the feature provides on with a channel through which one is able to send or receive money through their bank account on WhatsApp to their contacts.

Why India?

With the second largest population of about 1.32 billion persons in 2016 (according to Google’s Public Data analysis)- India has over 200 million active WhatsApp users (about 24.6% of U.S.A’s current population), hence proving to be a strong base for the social media app.

It is with this strong foundation that WhatsApp can be a serious threat to its competitors in digital wallets especially Paytm, Google Tez, PhonePe.

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