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WhatsApp will launch its first digital payments service in India
WhatsApp is the most popular messaging app in India, with over 200 million users — more than it has in any other market. And to capitalize on this, the company is reportedly planning to launch a digital payments service in the country some time in the coming months. The move was first reported by local media, with a spokesperson for the company later telling Bloomberg that WhatsApp wants to “contribute more to India's vision for digital commerce.”
What exactly WhatsApp will offer users isn't clear at this point, but the move is logical, perhaps even necessary. Since Facebook bought WhatsApp in 2014 for $22 billion, the app has continued to grow in popularity and now boasts more than 1.2 billion users. But, is has yet to find a way to monetize its user base. (WhatsApp did once charge an annual $1 subscription fee, but this was dropped in 2016 as a barrier to user growth.)
India is also experiencing a boom in mobile payment apps at the moment. Last year, the government announced plans to demonetize large denomination bank notes in an effort to crack down on tax evasion and counterfeits. (The old notes could be exchanged for new versions.) This led to a shortage in notes in a country where cash is still very much king, and, subsequently, an increased interest in mobile payment apps.
WhatsApp is, by some measures, more popular in India than Facebook itself, and the messaging app has already been adapted to play unexpected roles in the country's economy. Analysts Neil Shah told The Financial Times the app is already used informally to sell goods. “I've seen people selling baby clothes, medicines, art and craft supplies — it's become a Craigslist type of offering,” said Shah.
In January 2016, digital payment services in India clocked up more than 262 million transactions worth some $1.3 billion, according to to the Reserve Bank of India — up from 100 million transactions last October. The government has also launched its own digital payments framework for digital payments, the Unified Payments Service, to foster this growth, letting banks and mobile apps easily exchange currency. If WhatsApp does launch a payment service, it will have certainly picked the right time to get involved.