Facebook Inc., which has been struggling for years to get a permit to operate its WhatsApp payments service in India, finally got approval for the rollout, marking a breakthrough year for the tech giant that also saw it partner with billionaire Mukesh. Ambani to expand into the world’s largest open technology market.
WhatsApp Pay can be activated using the homegrown multi-bank unified payments interface, its operator, the National Payments Corporation of India, said in a statement Thursday. The US social media giant can gradually expand its UPI base starting with up to 20 million users. Facebook has been testing WhatsApp payments in India since early 2018.
The approval is the latest milestone for the firm led by billionaire Mark Zuckerberg that invested $ 5.7 billion by agreeing to buy a 9.99% stake in Ambani’s digital services unit, Jio Platforms Ltd., in April. The Ambani unit has attracted more than $ 20 billion from investors including Intel Corp. and Google, as global tech giants doubled by partnering with the richest man in Asia and the most influential business leader in India.
“Now you can easily send money to your friends and family, as easily as sending a message. There is no fee and it is backed by more than 140 banks, ”Zuckerberg said in a video post. He added that it was available in 10 versions of WhatsApp in Indian regional languages.
Crowded market
Facebook has been open about its ambition to build a large commercial business in India with WhatsApp messaging at the center. India’s payments market is crowded with national pioneer Paytm, Google Pay, Walmart Inc.’s PhonePe, Amazon.com Inc.’s Amazon Pay, and dozens of other startups, but WhatsApp’s huge user base of over $ 400 million gives you a unique advantage in a market that is set to grow to $ 1 trillion by 2023.
“Starting today, people across India will be able to send money via WhatsApp,” the company said in a November 6 blog post on its website. “We are excited to join India’s campaign to increase the ease and use of digital payments, which is helping to expand financial inclusion in India.”
Unlike other rivals, WhatsApp will be able to add clients to its payment service quickly due to the ubiquity of its messaging app. Almost all other mobile internet users are WhatsApp users. India is Facebook and WhatsApp’s largest market, at a time when the US firm is looking for areas to add new users as more lucrative markets like the United States and Europe saturate.
Meanwhile, Ambani has focused on technology and e-commerce as pillars of expansion for his company Reliance Industries Ltd., which in turn controls the digital and retail units, moving away from the energy business it inherited in 2002. Ambani is leading this transformation at Reliance that makes Facebook and WhatsApp an integral part of its future plans, especially as the mogul seeks to take on Flipkart, owned by Amazon and Walmart Inc., in e-commerce.
WhatsApp launch
Facebook’s WhatsApp payments rollout was in the works long before the Ambani tie-in. The service, which had been in trial mode with one million users for nearly three years, was said to be close to receiving the green light for its payments service in February.
Still, Indian regulators have blocked some of Facebook’s previous business efforts in India, including a program that offered free Internet access to a limited number of websites.
WhatsApp has added business features in recent years, including product and store catalogs, so that small businesses can promote and sell products directly through the app. Payments are a key part of enabling those transactions. The company also hopes to use these product catalogs as a starting point to lead small businesses to other Facebook services, such as advertising and customer service tools.
Prevent monopoly
The National Payments Corporation of India has imposed a 30% volume limit on all external payment providers on its payment platform, to prevent a single entity from monopolizing the market. Existing payment operators have two years from January 1 to comply with this limit, the government body said in a separate statement on Thursday.
Facebook executives envision WhatsApp serving as a one-stop shop for small Indian businesses, which can sell products and engage with customers on a service already used by hundreds of millions of people in the country. They hope to replicate that plan in other markets, such as Brazil, although efforts to bring payments there have also faced regulatory challenges.
“In the long term, we believe that the combination of WhatsApp and UPI’s unique architecture can help local organizations address some of the key challenges of our time, including increasing rural participation in the digital economy and service delivery. financial institutions to whom they had never had access before. “The company said in a statement.
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