WhatsApp is said to hasten payments push in biggest market
The messaging app will partner with HDFC Bank Ltd., ICICI Bank Ltd. and Axis Bank Ltd. to process the transfers, and State Bank of India will join once it has the necessary systems in place, the people said. Facebook was aiming for a full rollout with four partners but decided to go ahead with just three as its rivals were racing ahead, the people said, asking not to be named as the information isn’t public.
The entry of WhatsApp into India’s payments space has been likened to WeChat, which reshaped payments in China when it expanded beyond messaging. The pilot version of WhatsApp Pay -- started with 1 million users in February -- received rave reviews, threatening the market share of incumbents Google Tez and Alibaba-backed Paytm, which lack the benefits of a social network.
“WhatsApp has a great starting point: a monopoly in chat,” said Vivek Belgavi, leader for financial technology at PwC India. “High engagement makes it a credible competition.”
More than 200 million Indians already use WhatsApp messaging, equivalent to 60 percent of the U.S. population and a daily active usage that Forrester Inc. estimates to be about 20 times higher than Paytm’s.
A representative for WhatsApp said the company doesn’t comment on speculation. ICICI Bank couldn’t immediately comment and emails to State Bank of India, HDFC Bank, and Axis Bank weren’t answered. These banks will process transfers of money to any bank in India’s financial system.
One of the most outspoken critics of WhatsApp Pay has been Vijay Shekhar Sharma, founder of Paytm Payments Bank Pvt. His startup has been one of the biggest winners from the Indian government’s clampdown on cash and Sharma fired off a barrage of angry tweets in February, claiming that WhatsApp had bypassed security requirements and that Facebook was trying to create a walled payments garden.
National Payments Corp. of India, the umbrella body that oversees retail payments and settlement systems in Asia’s No.3 economy, has no concerns about data security on the payment services offered by WhatsApp, Dilip Asbe, chief executive officer of NPCI, said in Mumbai on May 9.