WhatsApp Pay: A Prediction

Finally after wait of many months NPCI has given go ahead to Facebook to launch their UPI based WhatsApp Pay service. I had used their service when they had launched their pilot last year and found the user experience super efficient for P2P payments. On multiple occasions we used this method to pay to or claim from friends just after receiving or sending a message about the due amount.

One more thing unique about paying money through WhatsApp pay was no need to input a PIN to access the UPI payment option. In case of any other UPI app customer has to input a PIN for accessing the UPI app (some apps like Google Pay give you the option to use your phone’s access PIN itself as this PIN) and then once again he/she needs to input his/her UPI PIN just before processing the payment. In case of WhatsApp pay, only the second PIN was being asked. This had led to some controversy also due to few leading players objecting to NPCI allowing WhatsApp to bypass the access PIN, which I also believed was giving WhatsApp an unfair advantage against its peers.

In their final version, I doubt they will be allowed to continue with this exception and they may or may not come up with any other more convenient way to introduce the access level control. Still the biggest advantage they have is their almost monopoly on P2P messaging.

One of the biggest advantage UPI had brought in payments was making it easier to communicate source and destination account address by introducing VPA. What WhatsApp’s ownership of messaging channel means that now there will not be a need to even communicate the VPA.

Dominating methods used for P2P payments before introduction of UPI were IMPS/NEFT (completely controlled by banks) or mobile wallets (with PayTM leading the game there), since the launch of UPI I have observed many people use Google Pay. With mobile wallets on its decline and Banks not bothering much to improve their UX (irrespective of customer’s mode of choice, the money eventually will flow in the bank account), they may end up getting into partnership with WhatsApp by becoming PSP sponsor. The only real competition left to face for WhatsApp in P2P payments space will be Google Pay, where WhatsApp has a clear advantage due to them owning the messaging channel.

To summarize, I am of the belief that WhatsApp is going to be the clear winner in P2P payments space. I do not have clear visibility on how much WhatsApp for business has picked up, but they may even have a chance to process P2M from with-in their messaging platform.

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