NPCI eases cap on WhatsApp payments service to expand to 100 mn users

Regulator granted WhatsApp approval in November 2020 to go live on UPI in the multi-bank model in a graded manner.

The National Payments Corporation of India (NPCI) has allowed Meta-owned WhatsApp to add sixty million users to its payments service, taking the total number of consumers it can offer the unified payment interface or UPI-based feature to 100 million.

The NPCI granted WhatsApp approval in November 2020 to go live on UPI in the multi-bank model in a graded manner, allowing 20 million users to start off with. The number was later increased to 40 million last year.

After the cap was extended to 40 million users, Manesh Mahatme, director-payments for WhatsApp India, said his company would work with the NPCI to expand its users.

WhatsApp has not been able to create a place for itself in the crowded third party app providers (TPAPs) space. It processed 2.54 million transactions in March, amounting to Rs 239.78 crore at a time when UPI processed a record 5.4 billion transactions amounting to Rs 9.6 trillion.

WhatsApp competes with Alphabet Inc's Google Pay, SoftBank- and Ant Group-backed Paytm and Walmart's PhonePe in India's crowded digital market. Online transactions, lending and e-wallet services have been growing rapidly in India, led by a government push to make the country's cash-loving merchants and consumers adopt digital payments. PhonePe and Google Pay together control about 81 per cent of the UPI market.

The day WhatsApp was allowed to go live on UPI, that very day NPCI brought in regulations that capped the share of a total number of transactions that a third-party application can process at 30 per cent of the total volume of transactions processed in UPI. The existing TPAPs who exceeded the cap was given a period of two years from January 2021, to comply with the regulations in a phased manner.

NPCI allowed WhatsApp, which has more than 400 million users in India, to go live on UPI in a graded manner because it did not want the messaging service to run away with the UPI market.