Messaging service WhatsApp has received regulatory approval to add 60 million more users to its payment service in India.
On Wednesday, the National Payments Corporation of India (NPCI) approved the Meta-owned service to more than double the user base of its payment service.
Earlier, WhatsApp was allowed to extend its payment service to 40 million users in India.
What is WhatsApp’s payment service, and what does this NPCI approval mean? Let’s find out:
What is WhatsApp’s payment service?
WhatsApp Pay is an in-chat payment feature that allows users to make money transactions via WhatsApp to people on their contact list.
WhatsApp Pay is a UPI-based payments service that allows users to send and receive money.
The messaging app received approval from NPCI in 2020 to roll out the digital payment service in a phased manner.
So far, WhatsApp Pay is available to 40 million messaging service users.
What does the NPCI approval mean?
After the latest approval of NPCI, 100 million WhatsApp users can transact money with each other using the payment service.
According to a report by Indian Express, in March alone, WhatsApp Pay accounted for only 0.05 percent of UPI transactions, which amounts to 2.54 million transactions worth Rs 239.78 crore.
To put it into perspective, PhonePe, another payment service, recorded 2.5 billion transactions in the same month, followed by Google Pay which saw 1.8 billion transactions.
With the NPCI approval, WhatsApp can start pushing its payment service to attract more merchants to the platform.
As a result of this clearance from NPCI, WhatsApp will be able to take on rivals such as Walmart-backed PhonePe and Google Pay.
As per the NPCI website, 25 third-party application providers, including WhatsApp, are allowed to provide payment services on UPI.
Even though WhatsApp has asked NPCI to allow it to expand the payment service to its entire user base without a cap, the NPCI has maintained that the messaging app does not get to skew the level-playing field with its enormous user base of 500 million people.
WhatsApp Pay’s troubles in India
Even after launching its service to 10 lakh people in 2018, WhatsApp has been embroiled in legal and regulatory issues with the RBI, NPCI, and the Ministry of Electronics and Information Technology to launch its UPI-based payments service to its entire customer base.
WhatsApp was told to establish data localization, local grievance officers, and domestic offices. The company met the demand to develop data localization in India.
In an affidavit filed by the central bank in the Supreme Court (SC) in 2020, NPCI had informed the RBI in June that it was satisfied with WhatsApp’s compliance with the regulator’s data storage norms.
According to Indian Express, a case was also filed against WhatsApp at the Competition Commission of India alleging abuse of its dominant position to launch WhatsApp Pay in India. However, the antitrust panel dismissed the case.