WhatsApp Pay to Launch in India by May-End With 3 Banks on Board: Report

WhatsApp Pay is set to go live as early as by the end of the month, according to a report. The payments service by the instant messaging app, which is currently under beta testing, is said to be launched initially in partnership with three private banks, namely Axis Bank, HDFC Bank, and ICICI Bank, while public sector State Bank of India (SBI) will join at a later stage. At present, WhatsApp Pay allows transactions based on Unified Payments Interface (UPI) via ICICI Bank.

Axis Bank, HDFC Bank, ICICI Bank, and SBI, all four banks are said to be in the process of integrating with WhatsApp, reports Moneycontrol.com, citing a couple of bankers familiar with the development. However, the messaging app owned by Facebook is said to begin the public rollout of its payments service in the country with the three former private lenders.

The reason behind the delay in bringing SBI on board is mainly due to the requirement of a “robust security architecture” that should be in compliance with regulatory guidelines, the report said.

National Payments Corporation of India (NPCI) recently made it mandatory for large digital platforms offering UPI-based payments services to opt for a multi-bank model to avoid any delay in transactions. Such a model is also helpful in case one bank is facing issues in allowing payments. The drawbacks of using a single-bank model were seen during the moratorium of Yes Bank earlier this year that halted operations of platforms such as PhonePe and Swiggy for some time.

Google Pay and Truecaller are amongst the major platforms allowing transactions via multiple banks at the present stage. Interestingly, Google Pay already has Axis Bank, HDFC Bank, ICICI, and SBI as the four acquiring banks to enable UPI-based transactions.

Original plan on hold due to a litigation

In February, non-governmental organisation (NGO) Centre for Accountability and Systemic Change (CASC) filed a plea in the Supreme Court claiming that WhatsApp has not fully complied with the data localisation norms set by the Reserve Bank of India. “One million Indians cannot be reduced to guinea pigs. Their sensitive personal data, including financial data cannot be stored outside India in contravention to the RBI circular,” it had said.

Due to that litigation raising security concerns pertaining to WhatsApp Pay, the initial plan to bring its access to 10 million users initially has reportedly been held up.

A report earlier this year claimed that WhatsApp secured a licence from NPCI to begin the phased rollout of its payments service in the country. The service was started in the beta testing in February 2018. WhatsApp tied up with ICICI Bank to start enabling payments through the platform and brought certain updates to the backend to make the system ready for its public launch.

Facebook also has plans to go beyond India with WhatsApp Pay. CEO Mark Zuckerberg at the time of Facebook's earnings in late January mentioned that the company wants to roll out the payments service in several countries in the next six months.

WhatsApp Pay will compete directly against Amazon Pay UPI, Google Pay, PhonePe, and Paytm. Since the instant messaging app already has over 400 million users in India, its payments service could make things tougher for all the existing players in the market.

Last month, WhatsApp started enabling e-commerce operations for JioMart. That move was concurrent to the Rs. 43,574 crore investment that Facebook announced specifically for RIL's Jio Platforms to further expand in India. JioMart would emerge as one of the early platforms widening WhatsApp Pay in the country as consumers would be able to make purchases on the platform directly using the integrated payments service.