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How is WhatsApp Pay faring? The Challenges before it.

Created on 31 Aug 2020

Wraps up in 4 Min

Read by 3.3k people

Updated on 25 Aug 2022

These days, a user of an online mobile application has very little time and patience. They want everything to be available in just one click and want to fulfill their purpose within a very short span of time.

Adding to this, even though mobile phones are increasing their storage capacity constantly, users want to avoid downloading multiple applications and feed in their details that many times. A company that entertains this demand of the users is bound to succeed. 

Let's talk about the profitable e-commerce giant in India – Amazon. Its recent campaign of "Aapki Apni Dukaan" highlights its feature of being a one-stop store that provides everything under one roof, or under one application. One of the major reasons for Amazon's success in India is its convenient feature of providing a variety of products from different industries and brands, all under one single platform or in just one single app.

Just like they prefer Amazon because of their multiple products/services, they are always looking for mobile applications that will provide a variety of features and save them from the hassle of downloading multiple applications.

Latest in this race to be the most convenient and preferred app, one social media application is entering such a service sector that it even led to a lawsuit being filed against it.

Social media giant Facebook Inc., which owns other social media giants such as Facebook, Instagram, and WhatsApp, is soon to enter India's newly evolving UPI payment sector. For this, it has chosen WhatsApp, one of India's most popular applications, with the highest number of mobile downloads. With over 400 million users in India, WhatsApp will soon be launching its Unified Payments Interface (UPI) feature, which be called 'WhatsApp Pay.'

Facebook Inc.'s WhatsApp unit is soon to launch its online payment services in India, after getting a green signal from the National Payments Corp. of India (NPCI), which recently informed the Reserve Bank of India (RBI) that the messaging platform had met data localization requirements. However, WhatsApp is yet to receive formal communication from NPCI to officially launch its services.

How can WhatsApp Pay Compete with its Peers?

With Facebook's recent association with India's top industrial giant, Mukesh Ambani's Jio, WhatsApp Pay, with its already large number of users is set to attain a massive customer base.

The launch of WhatsApp Pay has been said to be crucial for Facebook to capitalize on its association with Reliance Jio, whose grocery delivery service, JioMart, is already allowing users to place their orders through WhatsApp. With a payments service, the integration between the two platforms could create a new spectrum of multi-feature mobile applications, owing to both these brands' already existent popularity.

With its pre-existent and massive user base, WhatsApp is already ahead of its UPI competitors, which include Amazon pay, Paytm, BhimUPI, etc., with GooglePay being its strongest competitor. Currently, GooglePay is the market leader with 67 million monthly active users in India. However, the astonishing part is that this number is less than 20% of the users that Whatsapp already has.

The promotion of this payment feature will be fairly easy and convenient for the company as WhatsApp pay will just be an added feature on the WhatsApp application. This will be a convenient option for the users of WhatsApp.

No additional data, except for the bank details will have to be fed in, no additional synching of the phone will be required as WhatsApp already is synched with the phone's contact list and most importantly, no separate payment application will have to be installed, thus saving the hassle of additional download.

Challenges Before the Launch

Recently, a complaint against WhatsApp was filed with the Competition Commission of India (CCI), which alleged that the messaging platform abused its market dominance to launch WhatsApp Pay in India. However, this complaint was dismissed by CCI, which said that WhatsApp Pay was available to "less than 1%" of WhatsApp users in India in its beta version and that it is actually "yet to manifest in the market."

Another major challenge for WhatsApp Pay will be to establish trust among its users. Despite a plethora of features and convenience, the safety-related to WhatsApp Pay is under question, which is also the reason behind the delay in its launch.

Since Facebook is already facing cases of data misuse and security breaches, it raises a question of trust among the users, especially when it comes to using its payment feature, which will require feeding in bank details.

Proving this feature's safety can be one of the biggest challenges that WhatsApp will have to face.

The Bottom Line

Nevertheless, WhatsApp Pay has recently received clearance for launch from several law-making bodies in India, including the Reserve Bank of India and the National Payments Corporation of India (NPCI). As per the latest available information, WhatsApp is still awaiting some permissions before its launch announcement in India.

Now, will this extra-convenient feature of being everything in one, be a monumental boom for WhatsApp? Only time will tell.

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Anuja Khandelwal

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Anuja Khandelwal is a finance content writer at Finology. With a bachelor’s degree in Management and a master’s in mass communication and journalism, Anuja started writing blogs as a hobby, which later turned into passion. Together, with her passion for writing and interest in Finance, she wishes to create unique infotainment through her words.

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