WhatsApp gets regulatory nod to go live with payments service in India

Facebook purchased a 9.99% in Reliance’s Jio Platforms earlier this year

Facebook has been testing WhatsApp payments in India for years, but regulatory hurdles have kept the app’s pilot project to a very small number of users. Reuters

India allowed Facebook to start operating its WhatsApp payments service in the world’s biggest open technology market.

WhatsApp pay can go live using the homegrown, multibank Unified Payments Interface, the National Payments Corporation of India said in a statement on Thursday. The US firm can gradually expand its UPI base starting with as many as 20 million users. Facebook has been testing WhatsApp payments in India for years, but regulatory hurdles have kept the app’s pilot project to a very small number of users.

India’s payments market is crowded with domestic pioneer Paytm, Alphabet’s Google Pay, Walmart’s PhonePe, Amazon.com’s Amazon Pay and dozens of other start-ups. Yet, given its enormous user base of more than 400 million, WhatsApp has the potential to compete with the leaders and reshape digital payments in India – a market slated to grow to $1 trillion by 2023.

Unlike some other rivals, WhatsApp will be able to add customers for its payments service organically because of the popularity of its messaging app in the country. India is WhatsApp’s largest market, and an important country for Facebook, which is looking for areas to add new users as more lucrative markets like the US and Europe become saturated.

Facebook earlier this year purchased a 9.99 per cent stake in Jio Platforms, the digital services firm owned by Mukesh Ambani, India’s richest man, and Facebook has been open about its ambition to build a large commerce business in India with WhatsApp messaging at the centre.

Some analysts have said that Facebook’s partnership with Mr Ambani would help the company navigate the country’s regulatory environment. Indian regulators have blocked some of Facebook’s previous business efforts in India, including a programme that offered free internet access to a limited number of websites.

WhatsApp has added commerce features in recent years, including product catalogues and shops, so that small businesses can promote and sell goods directly through the app. Payments is a key part of enabling those transactions. The company is also hoping to use these product catalogues as a jumping off point to bring small businesses to other Facebook services, like advertising and customer service tools.

Facebook executives foresee WhatsApp serving as a one-stop-shop for Indian small businesses, who can sell goods and interact with customers on a service that hundreds of millions of people in the country already use. They hope to replicate that plan in other markets, like Brazil, though efforts to bring payments there have also faced regulatory challenges.

A WhatsApp spokesman declined to comment.