WhatsApp Pay is growing rapidly in India. WhatsApp, a major social media platform, is used by millions of Indians. A while back, this Meta owned texting app had introduced an online payments feature using the UPI system such as the likes of PhonePe and Google Pay. The National Payments Corporation of India (NPCI) has now allowed WhatsApp to increase its user base from an earlier cap of 40 million to 100 million. NPCI is capping the limit of users that WhatsApp Pay can have so that an unfair advantage is not given to the platform, as it already has millions of users leveraging the app for regular texting.
PhonePe and Google Pay Should be Alert
PhonePe and Google Pay, two of the top payments platforms, should now be on alert as WhatsApp Pay can be a potential threat to their business. Since WhatsApp is already being used for texting by millions of Indians, it would only take a very small incentive for them to also use it for payments. It is worth noting that WhatsApp Pay was allowed to increase its user base to 40 million from 20 million in November 2021. So in a very short span of time, the NPCI has increased the cap from 40 million to 100 million. NPCI had confirmed the development to ET. The UPI based payment apps are now competing heavily with each other, with new players such as Tata Digital and more coming into the scene as well. For the unaware, in a move to ensure a fair playing ground in this space, NPCI had mandated that no one company/platform/app should be able to process more than 30% of the total UPI transaction volumes in a three-month period. NPCI keeps reviewing this figure and then decides whether a platform needs to be capped at a lower number or it should be higher than before.
