After being trapped in beta mode for more than two-and-a-half years, WhatsApp's famous messaging application has earned regulatory clearance to introduce a 'graded' Unified Payments Interface (UPI) where it will initially extend to a limit of 20 million users. So far, since February 2018, it has been limited to 1 million subscribers. Given its prominence, WhatsApp, which has 400 million monthly active users in India, was supposed to attract a large chunk of users on UPI.
WhatsApp mentioned earlier in its blog that it aimed to make transferring money as convenient as sending messages on the app. The company announced on Friday that the feature would begin today in India. In a blog announcing the new feature, WhatsApp said, "Starting today, people across India will be able to send money through WhatsApp. This secure payment experience makes transferring money just as easy as sending a message. People can safely send money to a family member or share the cost of goods from a distance without having to exchange cash in person or going to a local bank."
As of October, Google Pay and Walmart-owned PhonePe are the UPI leaders who own approximately 40 per cent of UPI shares each. The entry of WhatsApp has long been dreaded by competitors such as Google Pay, PhonePe, Paytm and others as it can alter market dynamics. WhatsApp has the potential to compete with India's leaders and reshape digital payments, a market that is expected to expand to $1 trillion by 2023.
Facebook acquired a 9.99 per cent stake in Jio Platforms, the internet services corporation operated by Mukesh Ambani, earlier this year. And with WhatsApp messaging at the centre, Facebook has been transparent about its intention to develop a big commerce company in India. Some observers have said that the alliance between Facebook and Ambani would allow the organisation to handle the regulatory environment of the country. Five leading banks in India, including ICICI Bank, HDFC Bank, Axis Bank, State Bank of India, and Jio Payments Bank, have partnered with WhatsApp.
WhatsApp pay approval comes after months of the legal battle between the Supreme Court and the Competition Commission of India and the RBI, following concerns about possible unlawful bundling of services and non-compliance with the rules on data localisation.