WhatsApp Pay to Begin Phased Rollout in India, Receives NPCI Licence: Report

WhatsApp Pay, which is so far available to India users under a pilot, has secured a licence from National Payments Corporation of India (NPCI) to kick off a phased rollout in the country, according to a media report. The new development would allow WhatsApp to grow its payments service that uses the government's Unified Payments Interface (UPI) to enable mobile transactions. The Facebook-owned company stated offering WhatsApp Pay to one million users in India in 2018 as a part of the beta testing, however, it hasn't been able to formally launch the service in the country due to delay in regulatory approval.

The first phase of WhatsApp Pay rollout will bring the payment service through the instant messaging app to as many as 10 million users in India, reports Business Standard. The service is said to have secured the licence from the NPCI on Thursday that was the first of some long-pending regulatory approvals that WhatsApp sought to officially launch WhatsApp Pay in the country.

“Pending other compliance points, the messaging platform will be able to do a full rollout,” said a person familiar with the development, as quoted by the English daily.

The full rollout would make WhatsApp Pay one of the largest mobile payments services in India, given the fact that WhatsApp already has over 400 million users in the country.

Gadgets 360 has reached out to WhatsApp for clarity on the rollout and will update this space as and when the company responds.

WhatsApp began the testing of its payments service through a trial run back in February 2018. Since then, the instant messaging app has provided a “Payment” option to its users to make UPI-based payments, powered by ICICI Bank.

During an earnings call last week, Facebook CEO Mark Zuckerberg had told analysts that WhatsApp Pay would be rolled out in several countries in the next six months. The executive had last year also hinted at the imminent launch of WhatsApp Pay in India. Moreover, alongside India, Facebook is aiming to bring its payments service through WhatsApp in other developing markets, including Brazil, Indonesia, and Mexico.

One of the prime reasons behind the delay in the launch of WhatsApp Pay in India is the number of data compliance issues that Facebook needs to address. The Indian government and the Reserve Bank of India (RBI) had expressed their concerns over some of WhatsApp's features. Cyber experts in the country have also considered WhatsApp Pay as a threat to the Indian digital banking ecosystem -- especially when looking at some of the recent vulnerabilities found in the messaging app.

WhatsApp Pay would give a tough fight to platforms such as Amazon Pay, Google Pay, and Alibaba-backed Paytm. Also, it would boost UPI-based transactions in the country that hit the mark of 1.3 billion in December -- with 111 percent year-over-year (YoY) growth.

A report published by KPMG in August last year had said that digital payments in India are growing at a compound annual growth rate (CAGR) of 12.7 percent in the number of non-cash transactions. Online payment gateway RazorPay in a separate report highlighted that India observed a massive 383 percent growth in digital payments from the financial year 2018 to financial year 2019.

All this shows a significant growth potential for WhatsApp Pay in India. However, it is unclear how Facebook would persuade regulators in the country over the ongoing data compliance issues.