Facebook owned smartphone messaging app WhatsApp is in news for eyeing rapidly growing digital payment industry in India. According to a post on WhatsApp’s website, it is planning to redesign the app to include digital transactions. For this, the company will collaborate with banks. This will help users to make digital payments using the application.
What turned India into a huge market: After the government’s unexpected decision of demonetization in November along with the introduction of a free 4G service by a telecom giant, the country has become a hotbed for digital business models. The Number of smartphone users and online wallet users have increased dramatically in the last few months.
Why WhatsApp in India when Facebook messenger already supports online payments in some countries? Facebook is already offering peer-to-peer payment support on Facebook messenger and registered to provide electronic payment services in Europe in October but now it has realized that WhatsApp is the best platform to use as wild card while entering the Indian digital payment industry. Indians rely on WhatsApp a lot. People have been seen selling cloths and even arts and crafts using the app. It can become the Indian equivalent of Craig List – classified advertisement website – in the US.
WhatsApp will be an active participant in Government projects: WhatsApp is looking to be a part of Unified Payment Service, which is a project by government of India launched last year. It is about funds transfer between two mobiles.
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WhatsApp will have stiff competition from the existing payment wallets such as Paytm and Mobikwick which are already dominating the market with more than 200 million users. Cash transactions in India are expected to fall more rapidly in coming years. It makes this opportunity bigger than ever before.
In 2014 when Facebook acquired WhatsApp for $22 billion, it was just an online messenger with some basic features. Till date WhatsApp has come up with a lot of new features to engage the user more.
It remains to be seen whether making WhatsApp a tool for digital payment pays off or not.