WhatsApp Pay has partnered with HDFC Bank, ICICI Bank and Axis Bank for transaction process. State Bank of India (SBI) will also join once it has the necessary systems in place, according to people privy to the information.
Facebook was eyeing a full rollout with four partners but decided to go ahead with just three as competitors in the space were racing ahead.
Many are comparing WhatsApp’s entry into digital payment space to that of WeChat which had reshaped payments in China expanding beyond messaging.
A pilot version of WhatsApp Pay, launched in February with 1 million users, received rave reviews, threatening the market share of its rivals Google Tez and Alibaba-backed Paytm. Both platforms lack the benefits of a social network.
“WhatsApp has a great starting point: a monopoly in chat,” said Vivek Belgavi, Leader for Financial Technology at PwC India. “High engagement makes it a credible competition.”
More than 200 million Indians already use WhatsApp messaging, equivalent to 60 percent of the US population and a daily active usage that Forrester Inc. estimates to be about 20 times higher than Paytm’s.
WhatsApp’s entry in India’s payments space marred with controversies
When WhatsApp first entered India’s payments space with its pilot project it was surrounded with controversies. Paytm’s CEO Vijay Shekhar Sharma had accused the company of trying to enter the market via unfair means.
Among the concerns raised by the Paytm founder was the fact that WhatsApp’s trial service does not require a login session and Aadhaar-based payments. Sharma believed a lack of a login makes WhatsApp payments a security risk, akin to giving an open ATM to everyone.