All about WhatsApp Pay, its vision for India and the struggle it is facing in getting the nod from RBI

Recently, the news reports suggested that the Reserve Bank of India (RBI), in its statement submitted before the Apex Court, has stated that National Payment Corporation of India (NPCI) is satisfied with WhatsApp’s compliance in terms of data-localisation norms, and that WhatsApp Pay is inches closer to getting the nod from RBI.  While the first part of the statement holds true, the second is far from reality.

The much awaited, WhatsApp Pay, a UPI-based payment service still awaits its full scale launch in India. On July 27, 2020, the banking regulator, Reserve Bank of India (RBI), submitted its affidavit before the Supreme Court of India, whereby RBI stated that even though National Payment Corporation of India (NPCI) is satisfied with WhatsApp’s compliance with the data localisation norms. However, the banking regulator, RBI itself is not satisfied with the said report. The RBI is denying giving WhatsApp the permission to roll out WhatsApp Pay on  full scale basis, until it satisfies the RBI in terms of the red flags raised in the compliance report. 

WhatsApp Pay, which was launched in India in February, 2018, as part of a trial run, still awaits the nod of the banking regulator, RBI, only after which it can launch its new exciting payment feature on a full scale basis, in India.

What is WhatsApp Pay?

• WhatsApp Pay is an in-chat payment feature of WhatsApp, that allows the users to make the payment transactions to their contact list on WhatsApp. It is a Unified Payment Interface (UPI) based payments service that allows the user to send, as well as receive money, directly from their bank accounts.
• To use WhatsApp Pay, a user will have to set up their UPI account on WhatsApp, after which they can sendand receive money directly from/to their bank account.
• The users will be able to send money directly through their chat screen, by tapping on the share file icon and selecting ‘payment’. The ‘payment’ section is also available on the shortcut menu.
• Users can also check their transaction history and account details. 
• The payment is backed by a secure Unified Payments Interface (UPI) method, where fund transfers can be initiated without having to provide bank account numbers and IFSC codes of recipients. Also, making the payments is very quick, as no account details or OTP is required to be entered.

When was WhatsApp Pay introduced in India?

WhatsApp Pay, in India, was launched in February, 2018 as part of a trial run, where the payments through WhatsApp were introduced to one million users, under a partnership with the ICICI Bank. 

When will WhatsApp Pay be launched on a full scale basis?

• Recently, the Reserve Bank of India (RBI) filed its statement before the Apex Court, where it annexed a letter, dated July 05, 2020, from National Payment Corporation of India (NPCI), wherein the NPCI has expressed its satisfaction with WhatsApp Pay’s compliance report in terms of the data-localisation norms, in India.
• However, the said report failed to satisfy the banking regulator, RBI. 
• The RBI is concerned that WhatsApp was storing some payment data elements, outside India, beyond the permissible limits.  
• So even with NPCI being on its side, WhatsApp Pay still awaits the blessings of the banking regulator, RBI. 
• It is only after RBI gives a ‘go-ahead’ to WhatsApp Pay, that it could be launched in India, on a full scale basis. 

WhatsApp’s Vision for India

• Now that Facebook is a part of Jio Platforms Limited, it plans to get thousands of small businesses on-boarded onto its chat platform, WhatsApp.
• Soon after that Facebook will also partner up with other 'folks' to bring more and more businesses in India onto WhatsApp. This is a part of FB's expansion plan for India.
• With smartphones and internet becoming accessible to more and more people in India, Indian traffic on WhatsApp is significantly growing.
• With the users already coming up on WhatsApp without much effort, Facebook is looking to bag this opportunity by bringing more and more businesses onto WhatsApp and then connecting them with large user base.
• With the vision of connecting users and businesses in mind, WhatsApp Pay feature will prove to be impregnable. Best part is that, everything will be under one App. Simple, easy, and convenient! 

The competitive road that awaits for the payment platforms in India

If WhatsApp Pay enters India on a full scale basis, the likes Paytm, PhonePe, Amazon Pay, Google Pay, Airtel Pay and others, will be worried. The most users would perhaps start using WhatsApp Pay by default payment App as WhatsApp is already a default messaging app for a large demographic of the around 400 million user base in India. And with WhatsApp rolling out this convenient payment feature within its own App, it is unlikely that the users would want to take an extra step to switch to a separate payment App for making the payments. 

Therefore, the companies would gear up for a tougher competition, and would be aiming to lure users with competitive offers in forms of cashback, discount and coupons, in order to retain users and gain more customers.  

As a user, we can only hope that the nod from the banking regulator comes out sooner.