Messaging platform WhatsApp has finally got the nod from the National Payments Corporation of India (NPCI) for starting its payment service in the country. NPCI has said that WhatsApp can expand its UPI user base in a graded manner beginning with a maximum of 20 million users.
Before making the announcement, NPCI made a big change in its Unified Payments Interface (UPI). The change puts a cap on single third parties such as WhatsApp, PhonePe and Google Pay which can now handle only 30% of overall UPI transaction volumes.
The Facebook-owned messaging application has been operating it UPI-based payment system called WhatsApp Pay in Beta since the year 2018. However, due to the regulatory hurdles the app’s pilot project has been operational with only a small number of users.
Since demonetisation, digital payments have become very common in India. The most popular UPI based payment apps in the country are Paytm, PhonePe, GooglePay and AmazonPay. Once WhatsPay Pay begins operating with more number of users, it can put up stiff competition for these apps owing to its large user base of more than 400 million. According to reports, digital payments markets in India is expected to grow to $1 trillion by 2023. India is World’s largest market for WhatsApp and its parent company Facebook is looking to expand its user base further by introducing new features.
Earlier this year, Facebook bought a 9.99 per cent stake in Jio Platforms owned by Mukesh Ambani. Experts were of the opinion that the company’s partnership was aimed at understanding India’s regulatory environment better. Some of Facebook’s earlier efforts at business were blocked by regulators which included a program that offered free internet access to users for visiting a limited number of websites.