WhatsApp, the Facebook-owned messaging app, is working quietly to launch person-to-person payments on its platform within the next six months, said four sources with knowledge of the matter.

The initiative is seen as strategic for Facebook and currently being driven out of the company’s headquarters in Menlo Park, California. Its career page lists, among other roles, an opening for a digital transaction lead with knowledge of UPI, Aadhaar and BHIM, to be based out of Menlo Park.

WhatsApp has no team in India as yet. But with over 200 million Indian users already, its entry into the payments space is likely to be pivotal for the entire sector.

There exist a slew of digital options in India currently for both person-to-person and person-to-merchant type transactions. These include prepaid wallets and prepaid cards, UPI (Unified Payments Interface), real-time bank transfers via IMPS and the soon-to-be-launched Aadhaar Pay. But much of this is very nascent, and there is a considerable overlap.

Thus, the protocol chosen by a giant like WhatsApp could potentially tilt the balance towards a leader.

The Ken understands that Whatsapp’s primary choice in this regard is UPI.

WhatsApp first admitted to being interested in launching payments in February, when its co-founder Brian Acton visited India. Interesting, his visit was exactly a year after Facebook shut down its controversial zero-rating programme, Free Basics, in India.

All sources requested not to be named because they are not authorised to speak with the media. The Ken sent an email to Facebook with details and specific questions on WhatsApp’s plans. The company in an email response did not contest any of the details but said, “India is an important country for WhatsApp, and we’re understanding how we can contribute more to the vision of Digital India. We’re exploring how we might work with companies that share this vision and continuing to listen closely to feedback from our users.”

Wallets out, UPI in

On 20 March, India’s Reserve Bank issued a mouthful of a circular titled “Master Directions on Issuance and Operation of Prepaid Payment Instruments (PPI) in India”. 

Jitendra Gupta, MD, PayU India

The PPI guideline is killing the use case of wallets. A wallet as an instrument may not exist in the future. It may become a sub-optimal option when compared to the UPI experience

In a single shot, the RBI had proposed a whole range of restrictions on PPIs, or as you might know them better, wallets. These included stricter know-your-customer (KYC) norms on par with banks; at the upper end, an imposition of limits on the money that could be stored.

AUTHOR

Arundhati Ramanathan

Arundhati is Bengaluru-based. She is interested in how people use money in the digital age and how new economies will take shape based on that interaction. She has spent over 10 years reporting and writing on various subjects. Previous stints were at Mint, Outlook Business and Reuters.

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