WhatsApp Pay Finally Launches in India With Certain Restrictions in Place

Whatsapp has received necessary approval from India’s payment regulators to officially start processing payments through Whatsapp Money.

The approval was given by the National Payments Corporation of India (NPCI) and allows Whatsapp to go live on India’s Unified Payments Interface (UPI). Using the interface, the social media giant can add its payment service to the many options that already exist in the country.

India is Whatsapp’s largest market with more than 400 million people using the app for daily communication purposes in the country. Whatsapp beta-tested the payment service in 2018 with about one million people.

Although the Instant Messenger has a sizeable number of users, the approval granted by the NPCI comes with certain restrictions which reduce the extent to which Whatsapp can service India’s populace.

Suggested Read: WhatsApp Pay’s Suspension Due to Regulatory Issues in Brazil Could Stall its Expansion into Africa

Per the terms of the approval, Whatsapp Money will be rolled out in a ‘graded manner’, which means that it will be available to a smaller percentage of Whatsapp’s total users. Out of the 400 million users, 20 million will have the payment option available to them while the others will make do with the existing payment options in the country like PhonePe and Google Pay.

In addition to the user restrictions, Whatsapp is mandated to work with other banks in carrying out its financial service. The social media company said it has partnered with ICICI Bank, HDFC Bank, Axis Bank, Jio Payments Bank and the State Bank of India.

Users who have bank accounts and debit cards in India, as well as use a UPI-supported app, can transfer money directly between banks in the country.

Over time, the NPCI said Whatsapp can gradually increase the number of its users that it can extend its service to on the Unified Payments Interface.

The total volume of transactions that Whatsapp and any other third-party payment app can process in India can not be more than 30% of the entire transactions processed in the UPI. While this limit will officially be effective from January 1, 2021, the restrictions on user volume have already been put in place for Whatsapp to ensure compliance with the limit on transaction percentage.

Whatsapp Pay’s unsuccessful attempt to launch in Brazil

Whatsapp has tried to launch its payment service in Brazil where it has 120 million users, its second-highest number of users. The attempt was cut short by Brazil’s Central Bank barely a week after launching. According to the Brazilian authorities, Whatsapp Pay’s service in the country posed concerns about data protection as well as competitiveness in the payments sector.

Technext reported that a week after Facebook entered an agreement with Visa and MasterCard for Whatsapp’s payment service in Brazil, the Central Bank created a rule that nullified the partnership.

The partnership with the Indian authorities has opened a way for the payment service to operate in the country. The regulations provide room for competition as well as some space for growth, considering that Whatsapp can add more users to its UPI database in future.