Facebook owned instant messaging app WhatsApp is likely to launch peer-to-peer payments in India in the next six months, according to a new report.
The company is also hiring a head of digital transactions with expertise in UPI (Unified Payments Interface), Aadhaar (India’s biometric identity system) and BHIM, the payments app launched by a consortium of major Indian banks. This was first reported by The Ken in a well researched story (behind paywall). In an interview to Times of india in February, WhatsApp co-founder Brian Acton had said that the company may enter digital payments and that it is in ‘early stages’ of investigating the segment.
WhatsApp has over 200 million users in the country and is by far the most popular messaging service in India. It is already being used in a big way by small and individuals business owners to talk to their customers. In rural Uttar Pradesh, for instance, there’s even a WhatsApp based news service with over 8000 paid subscribers (Rs 100/year) run by a journalist.
Over the last few months, India’s digital payments scene has exploded. Total value of digital transactions have grown year on year, according to this Mint report based on data from India’s central bank. The government in November last year, moved to demonetise currency notes of Rs 500 and Rs 1000 to curb black money. This created a shortage of cash in the market and forced many users to hop onto the digital payments bandwagon.
India has also built out the Unified Payments Interface– a sort of plumbing between banking systems– on top of which many payments apps can be built. Apps built on UPI can seamlessly transact between accounts. BHIM, for instance, launched by India’s Prime Minister Narendra Modi in December 2016 is one such app. In February, Finance minister Arun Jaitley said that nearly 12.5 million people have downloaded the BHIM app.
Most banks and private wallet operators like PhonePe and Paytm also support UPI based payments now.