Facebook is launching its WhatsApp payment service for users in India after receiving approval from the country’s regulators. The service was first launched in India as a beta version in 2018, but the full launch was delayed for years due to concerns about data storage and sharing. It’s a major launch for what is WhatsApp’s largest market, home to some 400 million users.
India’s regulatory body for retail payments, the National Payments Corporation of India (NPCI), gave WhatsApp its approval on Thursday, and Facebook confirmed the launch of the service a few hours later in a blog post. The news was significant enough that Facebook CEO Mark Zuckerberg created a video (included below) explaining some of its features.
“Now you can easily send money to your friends and family via WhatsApp just as easily as sending a message,” Zuckerberg said. He also suggested that digital payments were “especially important” during a global pandemic, eliminating the need to exchange cash in person.
WhatsApp’s payment system will use India’s national payments infrastructure, known as the Unified Payment Interface or UPI. This enables interoperability between different apps and is also used by Walmart’s PhonePe and Google Pay, two of the nation’s largest UPI mobile payment providers, both of which control about 40 percent of the market.
But digital payment providers in India will face new challenges in the coming months. As reported by TechCrunch, NPCI also announced this week that it would limit the number of UPI transactions that any service can process for “[protect] the UPI ecosystem. “In the future, no service will be able to process more than 30 percent of the total volume of UPI transactions, but it is unclear how these limits will be enforced.
WhatsApp will take a while to reach these limits, although the NPCI made it clear that it will control the Facebook-owned payment service from the start. The regulator said WhatsApp would only be allowed to launch the service on a “graduated” basis, starting with “a maximum registered user base” of 20 million UPI clients.
In a blog post, Facebook said it had worked with five “leading banks” on its new payment service: ICICI Bank, HDFC Bank, Axis Bank, State Bank of India and Jio Payments Bank. UPI itself has the backing of more than 160 banks.
