WhatsApp Pay, which enables users to send and receive money via the famous messaging service, a subsidiary of Facebook, set out at the beginning of November to conquer the Indian market. The application counts 400 million monthly users of its messaging functions in this country.
Strict regulations on the Indian market
While players such as Google Pay, Paytm and PhonePe are already present in India, WhatsApp Pay had been limited to a test mode involving just 1 million users: the country's authorities were demanding greater guarantees regarding data storage. The hacking of WhatsApp in 2019 by the Israeli firm NSO's Pegasus spyware had not reassured the Indian authorities.
WhatsApp has therefore revised its data storage policy and had it audited by Deloitte, which has given it the green light to roll out more widely on the Indian market. However, WhatsApp Pay will officially be limited to a 30% market share, as the Indian authorities have decided to introduce new regulations to avoid locking out competition. Players already present in India must comply by January 2023.
However, the implementation of this regulation promises to be complex: will payment platforms really be able to be limited by user or by number of transactions per hour? What's more, it will be impossible for them to know whether they are exceeding the 30% threshold, since the percentage achieved by competitors will be unknown to them.
How will WhatsApp Pay work in India?
In India, payment via the WhatsApp messaging service is based on the Unified Payments Interface (UPI) instant payment system, developed by the National Payments Corporation of India (NPCI). Individuals can therefore send money to each other, or settle transactions at a merchant, provided both parties have an account at one of the 160 banks registered by the NPCI.
WhatsApp's competitors on the Indian market also rely on the UPI system: Google Pay, Paytm and PhonePe account for no less than 95% of the activity recorded in 2020 on UPI, which has already enabled 2 billion transactions.
WhatsApp will initially have to make do with 20 million UPI customers, and will only be able to roll out its mobile payment service in India gradually.