WhatsApp has been operating its payment service as a closed beta for well over a year and it has faced a lot of regulatory hurdles from the NPCI. Now it appears that that the company is preparing a report to submit to the Reserve Bank of India for approval which would make the payments service mainstream.
Facebook Inc. is moving a step closer to launching its long-delayed WhatsApp payments service in India after wrapping up an audit of related data practices, according to people familiar with the matter.
The payments offering has been in beta mode in India since early 2018 for a million users, but the nationwide debut has been delayed, in part because of government regulations. WhatsApp is required to show a third-party auditor that all data involved in payments will be stored on servers only in India. WhatsApp is preparing to submit the report for approval to India’s banking regulator, the Reserve Bank of India, said one of the people, asking not to be named as the matter is confidential.
WhatsApp is moving into a crowded and competitive field, where local startups and global players are already slugging it out. Amazon Pay and Paytm, the country’s most popular digital payments service, have already complied with the Reserve Bank’s data localization guidelines. India’s digital payments market is projected to grow five-fold and hit $1 trillion by 2023, according to a report by investment bank Credit Suisse Group AG.
WhatsApp has substantial strengths including an India user base that’s estimated at more than 300 million. The Facebook unit could grab market share from rivals and shake up the industry, said Arnav Gupta, an analyst who tracks digital payments at Forrester Research.
“Everybody from eight to 80 years old in India are clued into WhatsApp, giving it phenomenal reach,” said Gupta. “Besides, peer-to-peer businesses like MakeMyTrip and BookMyShow, which are already using WhatsApp, will find it very easy to route payment transactions through the messaging app.”
WhatsApp declined to comment on whether or not an audit is underway. "WhatsApp looks forward to providing WhatsApp Payments based on the UPI standard to all users in India and we continue to work with our local partners towards a shared goal of supporting a more Digital India," spokesman Carl Woog said in an email.
Source: Bloomberg.com
