WhatsApp Pay gears up to take on rivals Google Pay, PhonePe and Paytm

Messenger app has an average monthly download of 30.8 mn

With Facebook hoping to get the Reserve Bank of India’s (RBI’s) permission for WhatsApp Pay soon, the company is bracing itself up to take on its rivals Google Pay, Walmart’s PhonePe, Alibaba-backed Paytm, and Amazon Pay in the growing UPI-based digital payments market.

According to industry estimates, the biggest player is Google Pay with over a 40 per cent market share, closely followed by PhonePe. Facebook, according to sources, has complied with the RBI’s rules on data localisation. This, experts say, was a key reason for the delay in getting the green signal, though the company declined to comment on this issue.   

However, Abhijit Bose, head of Indian operations, said: “We are keen to launch WhatsApp Payments in the country and will continue to work with the government, local banks, and other institutions to understand their requirements, drive innovation, and provide financial services, inclusivity, and empowerment across the socio-economic spectrum.”

Bose said the payments feature on WhatsApp was free for people to use. “Our goal is to help making payment as easy as sending a message,” he said. So can WhatsApp become India’s WeChat? 

The Chinese app, which combined messenger with payments, transformed into a “super app”, providing customers services such as flight booking, car hailing, movie tickets, paying for utilities, among others, without leaving the app. Its customer base covers over 83 per cent of the Chinese population. 

WhatsApp up is nowhere there in terms of penetration. But with over 400 million users, it is the most used app in the country, representing a third of the country’s population. Even the UPI platform, run by the National Payments Corporation of India, has over 150 million customers despite the fact that it has seen a 50 per cent increase in people joining it during Covid-19. As BofA Research points out, with the launch of WhatsApp, it expects this to go up because many first-time users might join it. 

So what does it bring to the table? Based on the data from SimilarWeb, which tracks trends in online sites and apps, in August this year, daily active users of WhatsApp were at 177.8 million, nearly five times the combined number of Google Pay, PhonePe, and Paytm. 

More importantly, the amount of time spent by each user on the messenger is over nine times that of its nearest rival in the business. That is not all. Despite a large subscriber base, WhatsApp has an average monthly download of 30.8 million (based on SimilarWeb numbers), which is double that of its nearest rival. Also customers use the app seven to ten times a day, a feat difficult to achieve for its rivals. However, experts say while the potential customer base is huge, what would determine its success is what percentage of those use the payment option.

There are other areas WhatsApp could leverage -- and a key one is its tie-up with Reliance Jio’s e-commerce platform Jio Mart (Facebook has taken 9.9 per cent in Jio Platforms). As part of the tie-up, Jio Mart, which went for a commercial launch a few months ago (currently it has over 7 million subscribers), will be integrated into WhatsApp in such a way that buyers and over 30 million kirana shops can book orders and deliver products without having to leave the messenger site.

Sources say talks are on to integrate WhatsApp Pay for these transactions. If that happens, this would provide large volumes of payment transactions for WhatsApp (currently UPI handles 5 billion financial transactions a month). 

The company could work with other players (as it is not an exclusive arrangement) to do this.

WhatsApp is also planning to offer financial services — credit, pension products, and insurance — targeted at lower-income sections in rural areas and to small and medium enterprises. Bose, in a recent fintech conference, said it had been working with leading banks like HDFC Bank, ICICI Bank, and Kotak Mahindra Bank to bring in financial services to those who are outside the banking system. He said ICICI Bank and Kotak Mahindra had reached 3 million new users by leveraging WhatsApp’s large customer base.