WhatsApp To Launch Payment Options For 200 Million Indians As Soon As Next Week

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Facebook Inc. is set to offer its WhatsApp payment services to its Indian users as early as next week in an attempt to win market share, as per media reports. However, its partners are not ready, said people close to the development. 

The messaging app will partner with HDFC Bank Ltd., ICICI Bank Ltd., and Axis Bank Ltd. to process the transfers. State Bank of India will join once it has the necessary systems in place, the people said.

Facebook decided to go forward with just three partners so that it is not left behind in the race by its rivals. 

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The entry of Whatsapp into India’s payments space is quite similar to that of WeChat, which reshaped payments in China when it expanded beyond messaging. The pilot version of WhatsApp Pay – started with 1 million users in February – received rave reviews, threatening the market share of incumbents Google Tez and Alibaba-backed Paytm, which 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,”

he pointed out.

More than 200 million Indians already use WhatsApp messaging, equivalent to 60 percent of the U.S. population. Surveys claim that on daily basis the use of WhatsApp is 20 times more than that of Paytm.

The National Payments Corp. of India, the umbrella body that oversees retail payments and settlement systems in the country, has expressed no concerns about data security on the payment services offered by WhatsApp.

Last month, the US-based cross-messaging platform has said it doesn’t share payment data for commercial purpose with Facebook.

One of the most outspoken critics of WhatsApp Pay has been Vijay Shekhar Sharma, founder of Paytm Payments Bank Pvt. His startup has been one of the biggest winners from the Indian government’s clampdown on cash and Sharma fired off a barrage of angry tweets in February, claiming that WhatsApp had bypassed security requirements and that Facebook was trying to create a walled payments garden. 

However, with the recent Cobrapost sting operation alleging that Paytm was asked to share user data with the PMO, we are confused as to what should be believed and what should be not. 

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