WhatsApp Payments Finally Arriving Next Month With UPI On Board!

We had reported last year that WhatsApp is working on adding an in-app payments system to their platform. It was supposed to go live in December 2017. Obviously, that didn’t happen. But now WhatsApp seems to be ready to launch the payments system, which could reach users as early as next week.

If the report from ET is to be believed, the payment feature could go live in the next month and India may become the first country to receive this feature. A person close to the developments has confirmed to ET that WhatsApp Payments is in the final phases of testing with a select group of users.

The source was quoted saying,

“The platform is already in beta stage (testing) with one of its partner banks. We expect the product to go live for consumers by the end of February, depending on how the trials work out,”

UPI Integration – The Crucial Element

WhatsApp is pulling all stops to ensure that their payment system is ready for and fully compliant with Unified Payments Interface or UPI as it is more commonly known. The most popular messaging app in India is currently in various stages of integrating its payment platform with banks which include State Bank Of India, ICICI Bank, HDFC Bank and Axis Bank.

WhatsApp had received the Indian government’s approval to integrate UPI into their payment system, back in July 2017. The government has allowed a majority of digital wallets and digital payment services like Paytm, Google Tez and PhonePe, to name a few. The government even have their own digital payments app, BHIM, which is also UPI enabled.

 

Pushed by the demonetisation, UPI has become one of the fastest-growing digital payments instruments in India. In December alone UPI has reported around 145 million transactions. Among digital wallets, Paytm has emerged as the most popular app with more than 100 million downloads.

WhatsApp is undoubtedly the most popular and the most-used messaging app in India. It has more than 1 billion downloads globally and around 200 million monthly active users in India. When their UPI-enabled payments platform rolls out, it is expected to bring a massive chunk of those users into the digital ecosystem.

But before that happens, there are many security issues which need to be overcome to ensure the security of transactions and the users’ bank data.

WhatsApp Payments Needs To Be Secure

A senior banker involved with WhatsApp’s system integration process said,

“To be able to send money as easily as a text message involves ensuring various levels of encryption to keep the data safe. UPI, by itself, also has a complicated settlement mechanism between various banking partners. These issues need to be attended to before the product goes live.”

WhatsApp’s payments platform will work something like this;

1. WhatsApp will be the top layer of the system which identifies the sender and the recipient at the back-end.
2. Its payments platform will already be integrated with banks, which will help identify the users’ bank accounts.
3. And finally, the Unified Payments Interface will help settle the transactions.

Digital payments in India are slowly gathering steam and finding acceptance among users. But compared to China, it is still at a nascent stage. China has wholeheartedly embraced the digital payments ecosystem and their volume back in 2016 was around $5 trillion! So, digital payments have a vast potential in India where mobile connectivity is increasing by the day and the government is keen on pushing digital payments to make it a way of life.

But WhatsApp is not the first messaging platform to offer digital payments in India. The homegrown Hike Messenger already offers a UPI-enabled digital payments system. Since June last year, Hike has reported around 10 million transactions through its platform. Hike is quite popular among users too. It has 10 million downloads in Google Play Store alone.

But, it pales when compared to WhatsApp’s popularity in the country. This is one reason why I am excited that WhatsApp’s payment platform is almost ready to roll out. It will mean a much wider outreach and awareness for digital payments in the country. And I firmly believe that digital payments are the future of money in India.

UPI’s integration into WhatsApp has kindled optimism for an even wider acceptance of digital payments in the country. The same banker, involved with WhatsApp’s system integration, was also quoted as saying,

“WhatsApp is expected to add stronger volume growth to the UPI platform. Even if it starts off primarily with peer-to-peer transactions, if it manages to build a usage habit among its captive users, then taking UPI for merchant payments will not be a huge challenge.”

What are your thoughts on digital payments and UPI? Do share your thoughts in the comments below.