Digital payments have really taken off in India after demonetization. Mobile Wallets, UPI, BHIM, Aadhaar Pay, the list is endless. More and more of our citizens are using debit and credit cards, internet banking and mobile banking. Why the entire state of Goa has gone cashless.
Now, something big is coming in the World of digital payments. You can soon pay using WhatsApp. WhatsApp is a free to download messenger app for smartphones. WhatsApp will soon launch a built-in payments feature by the end of February. WhatsApp will integrate its Unified Payments Interface (UPI) based payments feature with SBI, ICICI Bank, HDFC Bank and Axis Bank.
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WhatsApp is said to have more than 20 Crore monthly active users in India. WhatsApp is owned by Facebook, a social networking website. Through WhatsApp, you can send money to family and friends in seconds. It could be an excellent peer-to-peer payment system. Merchant payments can also be done through WhatsApp.
WhatsApp will identify the sender and the recipient (receiver) in the back-end. The WhatsApp payment system will be integrated with banks. WhatsApp will identify your bank accounts and UPI will help settle the transactions.
More than 14 Crore transactions were reported by UPI for the month of December. Google Tez, Paytm and Flipkart's payment arm PhonePe, are all supported by UPI.
WhatsApp is doing the beta testing (test run) with one of the partner banks. The bank is also doing security checks to make sure the data is safe.
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2. Can WhatsApp payments be a success?
WhatsApp enables payments from your linked accounts to other linked accounts. You can send/receive money from family and friends. Money can also be sent for Merchant Payments. WhatsApp already has more than 20 Crore monthly active users.
WhatsApp is the largest peer-to-peer communication platform in India. WhatsApp could use this massive user base to rapidly expand the payment service in India. UPI does not charge for peer-to-peer transactions. Merchant payments could be done through WhatsApp and merchants could be charged a fee.
WhatsApp plans to integrate merchants on its platform. WhatsApp could make money by charging merchants who use the platform.
If WhatsApp can integrate merchants on its platform and these merchants are made to pay a fee, WhatsApp payments can be a success.
SEE ALSO: Aadhaar Pay: Are Banks Ready For It?
WhatsApp could give you a VPA (Virtual Payment Address), which you can link with your WhatsApp account. Let's say you and several citizens link the WhatsApp issued VPA with the WhatsApp account. WhatsApp gets a lot of data from you and several citizens on spending habits, purchases and other transactions.
Facebook is the parent Company of WhatsApp. Facebook makes a lot of money through advertisements. Imagine what Facebook can do with all this data?
When WhatsApp payment feature takes off, it could be a massive boost for digital payments in the country. WhatsApp could face stiff competition from Google Tez and Phone Pe. Yet, with digital payments in India being relatively new, WhatsApp payments have immense potential to be a game changer in the financial payments sector. Be Wise, Get Rich.
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