WhatsApp entered an increasingly tense battle between multinational giants like Google and Alibaba on Friday for a slice of India’s fast-growing digital payments market.
The Facebook-owned company said it was launching WhatsApp Pay just hours after the country’s payments regulator gave it permission. India is the largest market for the courier company with some 400 million users.
Whatsapp Pay, which allows people to send and receive money through the messaging platform, was launched in Brazil in June, but was quickly suspended due to competition objections raised by the central bank. Since then, authorities have indicated that it will be allowed there.
Facebook boss Mark Zuckerberg said in a video statement accompanying the India launch that the move would boost “innovation” in payments.
Zuckerberg also praised India’s Unified Payment Interface (UPI), which is used in the country of 1.3 billion people to manage payment applications, with more than 140 Indian banks as part of the network.
UPI is also used by Alphabet Inc’s Google Pay, Walmart’s PhonePe, and Alibaba-backed Paytm, which dominate India’s digital payments market.
“India is the first country to do something like this,” Zuckerberg said of the network.
India’s UPI processed more than two billion transactions in October and 1.8 billion the previous month.
The stakes are high for all competitors, as the digital payments market was worth around $ 75 billion in 2019 and is expected to exceed $ 500 billion by 2025.
WhatsApp has partnered with five Indian lenders including State Bank of India, the largest public sector institution, HDFC Bank, ICICI Bank, Axis Bank, and Jio Payments Bank to implement the service.
The National Payments Corporation of India has put a limit of 20 million users of the WhatsApp service in the first phase. Everyone must have a debit card and a bank account.
The US firm has been waiting two years to launch its service, testing pilot payments for around one million clients.