Why WhatsApp Payments is losing out in India
COME to think of it, people don’t use standard text messaging services anymore. Instead, they use app-based services to message each other, with colorful emojis and images.
In Asia, WeChat, LINE, QQ, and WhatsApp are the apps of choice. However, WhatsApp has a particularly good hold on India.
The country of 1.3 billion people has more than 200 million WhatsApp users. In top-tier cities, the app is particularly popular and used across platforms by people of all ages.
As a result, WhatsApp’s parent company, Facebook, thinks it’s a great market to introduce WhatsApp Payments in.
In fact, the company started testing the app last month and hopes to be tough competition for the local digital payments giant Paytm.
Unfortunately, things haven’t gone to plan. According to reports from Bloomberg, the Indian government is holding up the launch of the payments service “over concerns about how users’ data will be stored and other issues”.
The country’s Ministry of Electronics and Information Technology, or MEITY, has asked WhatsApp and its partner banks to supply more details about the payments system.
MEITY has also asked WhatsApp to get a clean chit from the organization overseeing the country’s payments solutions, the National Payments Corporation of India.
The company has recently launched WhatsApp Business in India which it claims has been a roaring success with customers, especially among the smaller retail organizations in the country.
It seems natural that WhatsApp would like to keep up the momentum with the commercial roll-outs, and adding WhatsApp Payments to its portfolio in the market can lead to quick wins.
As of now, users can only chat with businesses about products, place orders, and receive receipts and reminders via the app.
However, with the launch, WhatsApp Payments might help create a seamless ecosystem within which regular commercial transactions take place.
WhatsApp Payments will also enable users to send money to one another, just as easily as they share messages – potentially allowing them to split bills and remit payment for movie tickets on the chatting application.
It is no surprise that Paytm Founder Vijay Shekhar Sharma doesn’t approve of Facebook’s entry into the payments space in India and has pointed out some valid issues.
According to Sharma, WhatsApp lacks a login-feature which makes WhatsApp Payments an “open ATM” to everyone, and thus, a security risk.
He also cites WhatsApp inclination to avoid linking with other local payment partners on WhatsApp Payments a cause for concern.
However, the fact is, if WhatsApp doesn’t secure the necessary approvals soon, its plans to conquer India might be doomed.
The company must not only beat domestic rival Paytm but also its global competitor Google who launched Tez in the Indian markets more than a year ago and is slowly building a loyal user base.