At the beginning of the year, WhatsApp Messenger launched the WhatsApp Pay function for paying for services and purchases via smartphone in India. Currently, a million users are “testing” the payment services of WhatsApp, a popular instant messenger owned by Facebook.
WhatsApp began testing its UPI-based payments feature in India in February this year, gradually expanding and updating the service's capabilities and fixing bugs. Through the use of National Payments Corporation of India's Unified Payments Interface (UPI), users get direct access to bank accounts through a virtual ID. The absence of the need to download a digital wallet, the speed and convenience of sending transfers, made the WhatsApp service popular and allowed to significantly expand the user base of the messenger in India.
Following positive beta testing results, a full functional product launch is expected to occur in the coming weeks, although an official announcement from the company has yet to be made. Although pending government approvals, changing regulations for payment companies and new guidelines from the Reserve Bank of India significantly slowed down the launch of WhatsApp, the company is now happy with the result and plans to expand its operations. Working closely with the National Payments Corporation of India (NPCI) and major banks, WhatsApp has received approval from NPCI to tie up with banks to facilitate financial transactions through the Unified Payments Interface (UPI). Despite widespread government support, India's Ministry of Electronics and Information Technology, concerned about the instant transfer service's security norms, approached NPCI to review WhatsApp's compliance with Reserve Bank of India regulations.
The entry of the experimental WhatsApp project into the Indian digital payments market has seriously heated up the competitive situation. According to experts, the Indian digital payments industry will grow fivefold in the next five years, and WhatsApp will claim a larger segment of this market, which cannot but cause concern among competitors. The main participants in the local market Paytm, Google Tez, PhonePe are seriously concerned about the rapid growth in the popularity of WhatsApp and believe that the company is seeking to monopolize the digital transfer market in the country.
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