Facebook-Jio collaboration unlikely to help Whatsapp Pay rollout2 min read . Updated: 22 Apr 2020, 12:55 PM IST
- Due to regulatory issues around data localization, WhatsApp Pay had remained in the beta version
- In February 2020, WhatsApp Pay was approved by NPCI to go live with initial 10 million users
Mumbai: Facebook’s $5.7 billion investment in Mukesh Ambani-led Reliance Jio Platforms could do a lot for India's internet and digital ecosystem, but helping Whatsapp Pay get a VIP entry into the payments universe won’t be one of them, said the companies on a concall with the media.
The payments ecosystem in India includes Alibaba backed Paytm, Walmart owned PhonePe as well as global players such as Facebook owned WhatsApp Payment, Google Pay, and Amazon Pay. These platforms leverage their highly engaged user base to drive the payments business (on the back of a strong P2P offering). Due to regulatory issues around data localization, WhatsApp Pay had remained in the beta version. However, in February 2020, it was approved by NPCI to go live with initial 10 million users out of its 400-million user base in India.
“As you know Whatsapp Payments is in the middle of a beta trial for a million users and we are hoping to get regulatory approval but this collaboration (with Jio Platforms) is only meant to really fuel the small business side of the economy," said Ajit Mohan, vice president and managing director of Facebook India.
Global social media and digital advertising platform Facebook announced a $5.7 billion, or ₹43,574 crore, investment in Jio Platforms Limited, part of Mukesh Ambani-led Reliance Industries Limited, making Facebook its largest minority shareholder today. The target audience again being the 60 million odd small businesses across the country that are basically the fabric of the unorganised retail economy.
According to a recent Bernstein report, three-year old Google Pay accounts for almost 35% share of UPI transactions, almost 67 million monthly active users, and US$110bn annualized run-rate volumes. Google Pay currently has over 3,000 online merchants including Zomato, BookMyShow, Swiggy, and RedBus among others, while it is accepted at over 200,000 offline stores across 3,500 towns and cities. Google Pay uses Machine Learning (ML)-based scam prevention models, and also displays explicit "scam" or "stranger" warnings if a user receives a request from someone suspicious or not in their contacts.
PhonePe has become the top UPI app in India with annualized run-rate volume of $95 billion in July 2019 with almost 200 million users and 10 million merchant network in India.
Whatsapp had run into trouble when the Indian government and Reserve Bank of India (RBI) expressed concerns over some of its features. While the platform had earlier said it had built a local system to store payments-related data to comply with the RBI's data localisation requirement, in an affidavit submitted to the Supreme Court, the RBI later said WhatsApp's Pay is yet to comply with its data localisation norms.
"One focus of our collaboration with Jio will be creating new ways for people and businesses to operate more effectively in the growing digital economy. For instance, by bringing together JioMart, Jio’s small business initiative, with the power of WhatsApp, we can enable people to connect with businesses, shop and ultimately purchase products in a seamless mobile experience," said a statement by Facebook about the investment.