WhatsApp has just announced the launch of its mobile payment service in India, one of the countries where WhatsApp is most popular.
In early 2020, Mark Zuckerberg, CEO of Facebook, parent of Instagram, WhatsApp and several other companies, said he expected mobile payments to start "working in several countries and we'll make a lot of progress on it in the next six months. That has not been the case at all, since WhatsApp Pay only arrived in Brazil and, to top it off, its deployment was suspended a few days later by Brazil's Central Bank.
Now eleven months later, almost to the end of 2020, WhatsApp has just announced the launch of its mobile payment service in India, one of the countries where WhatsApp is most popular. The company had already tried to bring its mobile payments to India and, in fact, launched it in the testing phase, but due to regulatory issues it finally had to launch it in Brazil. Now it seems that everything is well tied up in India, to the point that the system supports more than 160 banks.
Up to 160 banks for "the WhatsApp Bizum
WhatsApp's mobile payment system maintains certain similarities with Bizum. It is as simple as selecting the bank, entering the card details and sending the money to the user, who will receive it in his own account. The process is little more complex than sending a photo or file through WhatsApp, which a priori makes WhatsApp's mobile payments a very interesting alternative.
According to the company, they have designed the payment system in collaboration with the National Payments Corporation of India (NPCI) using the Unified Payment Interface (UPI). This real-time payment system enables transactions at more than 160 banks. WhatsApp claims to have worked with the five major banks in India, namely ICICI Bank, HDFC Bank, Axis Bank, State Bank of India and Jio Payments Bank, but they will be able to send money to any of the banks that support UPI.
To make the transfers you will need to have a bank account and a debit card in India. WhatsApp will send instructions to the bank to process the money transfer via UPI from the sender's account to the receiver's account. In addition to mobile payments between individuals, WhatsApp is confident that in the long term local organizations can use its system to improve the participation of rural people in the digital economy.
The NPCI, the agency that has collaborated with WhatsApp to launch the system, said in a press release that WhatsApp "can gradually expand its UPI user base starting with a base of 20 million registered UPI users. WhatsApp has around 400 million users in India, so it is unlikely that all users will be able to start sending money now.
In terms of security and privacy, WhatsApp explained that the payments "have been designed with a strong set of security and privacy principles" such as introducing the personal UPI pin for each transaction. They claim that the system is already available on iOS and Android and, for now, the company has not made any pronouncements on the launch of the feature in other countries.
The mess with Brazil
On June 15 WhatsApp launched mobile payments in Brazil, but nine days later the country's Central Bank ordered VISA and MasterCard to suspend all money transfers made via WhatsApp. The reason, said the bank at the time, was "to preserve an adequate competitive environment, which ensures the operation of an interoperable, fast, safe, transparent, open and cheap payment system".
This measure, explained the bank, "will allow the Central Bank to evaluate the risks for the good functioning of the Brazilian Payment System (SPB) and to verify compliance with the principles and rules," while "it could generate irreparable damage to the SPB, especially in terms of competition, efficiency and data privacy.