Sunday, January 17, 2021

WhatsApp Gets NPCI’s Nod To Offer Payment Services Via UPI; Will Compete With Google Pay, Paytm, Amazon Pay & More

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Mumbai: WhatsApp has finally received the National Payments Corporation of India (NPCI’s) nod to offer payment services via the Unified Payments Interface (UPI), ending a two-year wait for the Facebook-owned messaging platform. ALSO READ | WhatsApp Releases ‘Disappearing Messages’ Feature; Know How It Works, Check Steps To Enable

“NPCI has given approval for WhatsApp to ‘Go Live’ on UPI in the multi-bank model,” said NPCI, an umbrella organization for operating retail payments and settlement systems in India.

WhatsApp Pay, which has so far been operating pilot operations for users in India, will join an already crowded market of payment services offered via the UPI network.

WhatsApp Pay now will have to compete with some of the largest processors of UPI payments Google Pay, PhonePe, Paytm, and MobiKwik, apart from individual banks’ applications.

“WhatsApp can expand its UPI user base in a graded manner starting with a maximum registered user base of twenty (20) million in UPI,” said NCPI, which has created a full payment and settlement infrastructure in the country and changed the way payments are made in India through a bouquet of retail payment products.

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WhatsApp, with about 400 million users in India, has seen a considerable delay for the launch of WhatsApp Pay, initially due to data localization norms introduced by the Reserve Bank of India (RBI).

Interestingly, the go-ahead was given just after NPCI said it had issued a cap of 30% of the total volume of transactions processed in UPI, applicable to all third-party app providers (TPAPs). This will be with effect from January 1, 2021.

The 30% cap will be calculated on the total volume of transactions processed in UPI during the preceding three months (on a rolling basis).

“The existing TPAPs exceeding the specified cap will have a period of two years from January 2021, to comply with the same in a phased manner,” NPCI said.

According to NPCI, the cap “will help to address the risks and protect the UPI ecosystem as it further scales up.”

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The UPI ecosystem in India is dominated by Google Pay and PhonePe. According to estimates, both companies account for about 40% of the number of transactions each, while Paytm and Mobikwik together account for another 20% of the UPI transactions. This leaves applications of individual banks, including the government’s BHIM UPI app, barely with any share.

WhatsApp Pay, which has already onboarded one million users during its trial, has tied up with ICICI Bank for its payment services, while Google Pay and PhonePe have two or more bank partners.

Besides, WhatsApp Pay also faces a legal challenge in the Supreme Court as a plea was filed regarding a company’s pilot payment program earlier this year.

The Supreme Court on Thursday sought responses from the center, the RBI, and the National Payments Corporation of India on a PIL which alleged breach of financial data security of Indians using ‘Unified Payments Interface’ (UPI) services offered by big players like Amazon Pay , GooglePay and challenged the permission to WhatsApp to start UPI services.

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