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WhatsApp Payments to launch next week; here's how it can change the way you pay online

BusinessToday.In     May 31, 2018

WhatsApp Payments service by Facebook-owned WhatsApp could be launched as early as next week in India. While the news brings cheers to over 200 million active WhatsApp users across the country, it would certainly give sleepless nights to incumbent online payment leaders like Paytm, which till now dominates the e-wallet market with seamless e-payment services.

According to a report published in Bloomberg, the Facebook-owned company could roll out its payment service on WhatsApp as early as next week, for which it has partnered with top three private banks in India -- HDFC Bank, ICICI Bank and Axis Bank. The country's largest bank State Bank of India would also join in once all "necessary systems" would be in place. The report cites unknown sources claiming Facebook decided to launch the services next week in light of its "rivals racing ahead" in the payment service game.

How WhatsApp Pay will be different than other e-wallets

So, how is WhatsApp Pay going to be different than other online e-wallets like Paytm, Google Tez, PhonePe, etc, and what advantage does it hold over them? The first obvious advantage is its user base -- WhatsApp has over 200 million users, over 20 times higher than Paytm's daily active users. The WhatsApp Pay option was initially launched for its selected users (on beta versions of the app) in February 2018, and it had received positive reviews from its users. "WhatsApp has a great starting point: a monopoly in chat. High engagement makes it a credible competition," Vivek Belgavi, leader for financial technology at PwC India, told Bloomberg.

Experts suggest though the WhatsApp Pay option would more or less work on the same principle of sending and receiving payments, its ability to allow users to do it while chatting makes it a natural winner.

Besides, Facebook is also eyeing to capture a bigger market share if it succeeds in making WhatsApp more than just a messaging or calling app. Experts say Facebook wants WhatsApp to be India's WeChat, a social networking app that allows users to do everything from messaging, calling, shopping, payment, and host of other services you can think of in just one app. WeChat also integrated its messaging system with payments in 2013, giving a tough time to the domestic giant Alipay whose market share slipped significantly after its launch.

Will it change the way you pay?

With the total active WhatsApp users equivalent to over half the entire population of the US, to assume that a majority of smartphone users have WhatsApp installed in their mobile phone will not be an exaggeration. The avid WhatsApp users who use Paytm too would want to give it a try to make online payments for shopping or cab services. While other companies have to invest tons of money to acquire customer base, WhatsApp does not need to do it, thereby giving it an edge over the other companies.

The criticism over user security

While the sheer size of WhatsApp user base is enough to scare its rivals, some concerns regarding security requirements and no linking of other online payment wallets seem genuine. Paytm founder Vijay Shekhar Sharma, a vocal critique of WhatsApp Payments, had earlier said WhatsApp is openly colonising our payment system and is customising UPI to their benefit and arm-twisting it for customer implementation. He said a lack of login makes WhatsApp Payments an "open ATM" to everyone and is a security risk.

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