Facebook is rushing into the vast Indian market after agreeing in April to acquire a stake in billionaire Mukesh Ambani’s Jio platforms.
Facebook Inc., which struggled for years to get approval to operate its WhatsApp payment service in India, eventually got approval to launch. This was a breakthrough year for the tech giant, as it also expanded into the world’s largest open technology market as a partner to billionaire Mukesh Ambani.
WhatsApp Pay can go live with several banks via the domestic Unified Payments Interface, the operator of the National Payments Corporation of India said in a statement on Thursday. The US social media giant can gradually expand its UPI base, starting with up to 20 million users. Facebook has been testing WhatsApp payments in India since the beginning of 2018.
The approval marks the latest milestone for the billionaire company, led by Mark Zuckerberg, which plowed $ 5.7 billion in April by agreeing to acquire a 9.99% stake in Ambani’s digital services unit Jio Platforms Ltd. to buy. Ambani’s unit raised more than $ 20 billion from investors such as Intel Corp. and Google attracted as global tech giants have doubled as partners of the richest man in Asia and the most influential business leader in India.
“Now you can easily send money to your friends and family, just as easily as sending a message. There is no fee and it is supported by more than 140 banks, ”Zuckerberg said in a video post. He added that it was available in 10 Indian regional versions of WhatsApp.
Overcrowded market
Facebook has been open to its ambitions to build a large trading business in India with WhatsApp messaging at its center. The Indian payments market is overflowing with Paytm, Google Pay, PhonePe from Walmart Inc., Amazon Pay from Amazon.com Inc., and dozens of other startups. WhatsApp’s massive user base of more than 400 million, however, offers a unique advantage in a market that is set to grow to $ 1 trillion by 2023.
“Starting today, people across India can send money using WhatsApp,” the company said in a November 6 blog post on its website. “We are excited to be part of India’s campaign to improve the usability and use of digital payments, which is helping to build financial inclusion in India.”
Unlike some other competitors, the ubiquity of its messaging app allows WhatsApp to quickly add customers for its payment service. Almost every other mobile internet user is a WhatsApp user. India is Facebook and WhatsApps’ largest market at a time when the American company is looking for areas to add new users when more lucrative markets such as the US and Europe become saturated.
Meanwhile, Ambani has been developing technology and e-commerce as the pillars of expansion for his publicly traded Reliance Industries Ltd., which in turn controls the digital and retail units, on a fulcrum away from the energy business he inherited in 2002. Ambani leads This transformation at Reliance makes Facebook and WhatsApp an integral part of his future plans, especially as the e-commerce tycoon wants to compete against Flipkart from Amazon and Walmart Inc.
WhatsApp rollout
Facebook’s WhatsApp payment rollout was in the works long before the collaboration with Ambani. The service, which has been in test mode with a million users for nearly three years, is slated to be close to receiving the green light for its payment service in February.
Still, Indian regulators have blocked some of Facebook’s previous business activities in India, including a program that provides free internet access to a limited number of websites.
WhatsApp has added trading features over the past few years, including product catalogs and stores, so small businesses can advertise and sell goods directly through the app. Payments are an essential part of activating these transactions. The company also hopes to use these product catalogs as a starting point to bring small businesses to other Facebook services such as advertising and customer service tools.
Prevent monopoly
The National Payments Corporation of India has imposed a 30% volume cap on all payment providers on their payment platform to prevent a single company from monopolizing the market. Existing payment operators have two years from January 1 to adhere to this limit, the government agency said in a separate statement on Thursday.
Facebook executives see WhatsApp as a single point of contact for Indian small businesses who can sell goods and interact with customers through a service already used by hundreds of millions of people in the country. They hope to repeat this plan in other markets like Brazil, although efforts to make payments there have also faced regulatory challenges.
“In the long term, we believe that the combination of WhatsApp and UPI’s unique architecture can help local organizations address some of the key challenges of our time, including the increasing involvement of rural areas in the digital economy and the provision of financial services to those who have never had access, “the company said in a statement.
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