News service WhatsApp has received regulatory approval to expand its payments service in India by 60 million more users.
The National Payments Corporation of India (NPCI) on Wednesday approved the Meta-owned service to more than double the user base of its payment service.
WhatsApp was previously allowed to expand its payment service to 40 million users in India.
What is WhatsApp’s payment service and what does this NPCI approval mean, let’s find out:
What is the WhatsApp payment service?
It’s called WhatsApp Pay and it’s an in-chat payment feature that allows users to make money transactions through WhatsApp with people on their contact list.
WhatsApp Pay is a UPI-based payment service that allows users to send and receive money.
Also Read: What is WhatsApp payment service and how does it work?
The messaging app received approval from NPCI in 2020 to phase out the digital payment service.
To date, WhatsApp Pay has been available to 40 million users of the messaging service.
What does the NPCI approval mean?
After the latest approval from NPCI, 100 million WhatsApp users will be able to transact money with each other via the payment service.
According to a report by Indian ExpressIn March alone, WhatsApp Pay accounted for just 0.05 percent of UPI transactions, amounting to 2.54 million transactions worth Rs. 239.78 billion.
For comparison, PhonePe, another payment service, saw 2.5 billion transactions in the same month, followed by Google Pay with 1.8 billion transactions.
With NPCI approval, WhatsApp can start pushing its payment service to attract more merchants to the platform.
As a result of this clearance from NPCI, WhatsApp will be able to take on rivals like Walmart-backed PhonePe and Google Pay.
According to the NPCI website, there are a total of 25 third-party application providers, including WhatsApp, that are allowed to offer payment services on UPI.
Although WhatsApp has asked NPCI to expand the payment service to its entire user base without a cap, the NPCI has maintained that the messaging app, with its massive user base of 500 million people, cannot level the playing field.
The problems of WhatsApp Pay in India
Even after launching its service to 10,000 people in 2018, WhatsApp has been embroiled in legal and regulatory issues with the RBI, NPCI and the Department of Electronics and Information Technology to roll out its UPI-based payment service to its entire customer base.
WhatsApp has been instructed to set up data localization, local complaints officers and domestic offices. The company responded to the demand to establish data localization in India.
In an affidavit filed by the central bank with the Supreme Court (SC) in 2020, NPCI had informed RBI in June that it was satisfied with WhatsApp’s compliance with the regulator’s data retention standards.
Corresponding Indian Express, a case has also been filed against WhatsApp in the Indian Competition Commission, alleging that it abused its dominant position to launch WhatsApp Pay in India. However, the cartel office dismissed the case.
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