WhatsApp has been testing its payments service in India since early 2018 with over a million users. They are finally looking forward to expanding the feature towards more users in the world’s second largest internet market.
National Payments Corporation of India (NPCI), the body that operates the widely popular UPI payments infrastructure, made an announcement on Thursday evening, declaring that it has granted approval to WhatsApp to set up UPI-powered payments in India.
Parroting similar companies like Google and Samsung, WhatsApp has built its payments service atop UPI, a payments infrastructure built by a consortium of large banks in India. NPCI recently confirmed that WhatsApp, which has garnered a userbase of well-above 400 million in India, can now extend payments to its users in a “graded manner”. Currently, it is permitted to launch the payments service to a set of 20 million users and has to work alongside multiple banking partners.
The payments market in India is currently majorly dominated by Google and Walmart, aggregate for roughly 80% of the UPI market share. Since the 2016 demonetization, UPI payments have taken off immensely in India.
NPCI made the aforementioned announcement today shortly after it declared that they will be enforcing a cap on third-party apps to make certain that no single app processes more than 30% of all UPI transactions in a month. NPCI’s plan to enforce limit on other apps should surely benefit WhatsApp in many ways during the early days of the payments service launch, although it might return to bite again later.