- WhatsApp Pay began rolling out to one million users in India in 2018.
- It was a pilot programme that ended successfully.
- The positive response has led Facebook to expand the service into more markets.
WhatsApp has been testing the payments feature in India for quite some time now but its rollout is up in the air. India's data localisation regulations have caused a delay in the launch of WhatsApp's payments facility that the parent company Facebook is trying to abate. But despite the stalemate, Facebook CEO Mark Zuckerberg is optimistic about the expansion of the payment system on WhatsApp in more countries. WhatsApp Pay, as it is being called unofficially, will be rolled out in countries outside India in the next six months.
"I'm really excited about this, and I expect this to start rolling out in a number of countries and for us to make a lot of progress here in the next six months," Zuckerberg said at the company's earnings call on Thursday.
The response from one million users who participated in the pilot programme in India was the deciding factor for Facebook to introduce the WhatsApp Pay in other markets. Zuckerberg said that the momentum in the pilot programme, wherein "so many of the people kept using it week after week," concreted the future of the service. He, however, did not say what markets will be picked for the rollout.
That said, the rollout in different markets will be full of teething troubles, as it is in India presently. Facebook has struggled to reach the middle ground with the government of India with respect to data localisation for the wider rollout of WhatsApp's UPI-based payments feature.
India's top bank, the Reserve Bank of India, told the Supreme Court back in November last year that Facebook's payments service is not compliant with the country's newly-framed data localisation norms. According to the rule, the foreign companies are mandated to store the data of their users on the servers installed within India. The data could belong to any feature or service, including the payments facility that requires user's details such as bank account.
WhatsApp Pay is based on the Unified Payments Interface, commonly known as UPI, which is managed by the National Payments Corporation of India. NPCI was ordered by the RBI to prohibit WhatsApp from rolling out the payments feature. The short-lived test programme is in abeyance until an approval is received.
The mandate to store user data locally, the big tech argues, will impact the smooth relay of information between different entities across the world. But despite that concern, companies such as Google, Amazon Web Services, Oracle, and Microsoft Azure have already set up their data centres within the country. Facebook, on the other hand, is yet to install servers in the country in order to begin with the process of storing data locally.
Facebook already offers payments service in its marquee app, Messenger, and Instagram in developed countries, including the US. The venture into e-commerce saw the launch of features such as Facebook Marketplace and Instagram Shopping. The company also launched its full-scale payment system called Facebook Pay for a seamless transaction between apps, besides the banks. Facebook also launched its cryptocurrency last year called Libra amid the controversy over privacy.
Coming to emerging markets such as Brazil, Mexico, and India, Facebook sees an opportunity to reach businesses in more than one way. "Having small businesses succeed is not the only key to creating broad economic growth where everyone can support themselves, it's also important to maintaining healthy communities since small businesses are often where people come together," said Zuckerberg. The Facebook CEO said that WhatsApp's UPI-based payments facility will cover more than 400 million users, including the small and medium businesses in India.