In what could turn out to be a major game-changer in payment space, Whatsapp may enroll its payment service on full-fledge basis across India next week. The instant messaging giant, which is owned by Facebook, will be partnering with HDFC Bank Ltd., ICICI Bank Ltd. and Axis Bank for providing payment services. State bank of India (SBI) – India’s largest public sector bank – will also join the bandwagon as soon as the needed technology is put in place.
According to sources, Whatsapp could have waited for SBI to come on the board. However, users uninstalling Whatsapp from their smartphones have become a small but growing trend in the wake of Facebook’s data scandal. Hence, they realized that any further delay in the launch would allow its competitor to make more dent into the market share. Its main competitors include Paytm, Google Tez, Phonepe & MobiKwik, with Paytm currently been the most dominant player in the space.
Can Whatsapp turn out to be the major disruptor?
Industry experts claim that Whatsapp’s absolute monopoly in the instant messaging space lends it lots of undue advantage over all other competitors. Currently, Facebook owned instant messaging app has more than 200 million subscribers across India. Analysts argue that such a huge subscription base must be sufficient enough to give instant messaging giant a nice head-start in the payment space.
Probably, it is Whatsapp’s huge subscription base that is already making Paytm a little uncomfortable. Earlier this year, when government of India allowed the instant messaging app to start its payment services on trial basis, Paytm’s founder &CEO Vijay Sharma quickly denounced the move.
Sharma alleged that Whatsapp’s entry into the payment space will destroy India’s highly nascent UPI system and also accused Facebook of unethical lobbying in the government circle. However, most Industry peers did not share Sharma’s harsh sentiments and more or less welcomed government’s decision.
Sharma’s supposed fear about Whatsapp is presumably based on fact that it may take inspiration from China’s WeChat, which expanded its dominance beyond instant messaging space to emerge as a dominant player in China payment arena.