After two years of beta testing and struggle to deal with the Indian government over the full-fledged rollout of UPI-based payments service, WhatsApp has reportedly received a licence from The National Payments Corporation of India (NPCI) to operate in a phased manner in the country.
NPCI has granted a licence to the Facebook-owned company to operate its digital payment service in a phased manner, mentioned a Business Standard report quoting an executive from the Reserve Bank of India (RBI).
With over 400 million user base, WhatsApp has been piloting UPI-based payments service for select users ~ 1 million for over 24 months. Now, it will have an opportunity to run for 10 million users in first phase and can roll out for mass audience only after it complies with regulations pending at government level.
In a recent conversation on the matter, Facebook CEO Mark Zuckerberg had also said to media that the peer-to-peer (P2P) payments feature would be rolled out in several countries, including India, in the next six months.
WhatsApp entry into UPI ecosystem will make it a stiff competitor to existing players — Google Pay, PhonePe and Paytm — which hold over 90% market share in the peer-to-peer payments business.
UPI has been gaining unprecedented momentum for the last six months. On average, it has been clocking over 1 billion transactions every month since October 2019.
Industry experts tracking the space predict that WhatsApp will trigger the volume, as well as the value of transactions for the overall UPI ecosystem.
Recently, NPCI had reportedly approved bank associations’ request to remove interchange fees on UPI and RuPay card transactions. The umbrella organisation is still reviewing the abolishment of payments service provider (PSP) fee and switching fees.
The move could impact the growth of digital payments and likely to hamper the revenues made by PSPs like PhonePe and Google-Pay.