If Whatsapp starts a mobile wallet, what happens to Paytm
As reports suggest Whatsapp will launch UPI-linked payments in the next six months that will allow merchant-consumer transactions. That will make things difficult for Paytm.Updated: Apr 10, 2017 16:31 IST
For all valid reasons Paytm might be scared if Whatsapp starts person-to-person payment – after all that’s Vijay Shekhar Sharma’s big bet to transform digital payments in the country.
On Tuesday, The Ken reported that Whatsapp would launch UPI, or Unified Payments Interface-based payments in the next six months, according to four sources.
UPI is a software brought out by the government that allows transfer of money from one bank account to another, where the app (linked with UPI) acts as a mobile wallet.
If Whatsapp builds UPI-based payments, users will be able to transfer money through the chat application, taking the weight away from Paytm, which is the country’s largest mobile wallet.
Whatsapp is also looking to hire someone who has deep understanding of UPI, Aadhaar and the BHIM app.
The move was evident. During his India visit in February, Brian Acton, co-founder of Whatsapp said digital payments is an area the company is keen to explore.
For years Whatsapp hasn’t made any money, despite being a $19 billion acquisition by Facebook. But over the years it has pushed messaging service offered by telecom providers out, by offering it for free, just at an insignificant data cost. It is also changing the ways calls are made, both voice and video, again at free.
But that is changing. During his visit to India, Brian Acton, co-founder of Whatsapp said that the firm would find ways to make money, but not at the cost of diluting customer experience.
To its advantage, Whatsapp isn’t small. It has 200 million users in India. Paytm’s has less, with 160 million.
That’s also where Paytm’s worry starts – more people use Whatsapp, and those who don’t, know about it. At times people open Whatsapp up to 150 times a day, and they are familiar with the app.
Like video and voice calls, soon people will be able to buy goods from the shop and pay using Whatsapp – where Paytm is the largest player with millions of merchants accepting digital using a Paytm wallet.
If Whatsapp can double up as a wallet, users might not have a reason to install Paytm on the smartphones. The wallet might be one of the many features such as chat, video and voice calls.
Going by what Whatsapp has done in the past, when the payments service is rolled out, 200 million users will straight away get the feature in form of a technology upgrade in matter of hours, making things worse for Paytm.
Meanwhile, Whatsapp is also looking at launching Whatsapp for Business in India for small and medium enterprises. “This is for very small businesses, employing less than 10 people… which will help them manage businesses in an easier manner, whether it is about managing customer contact lists or multi-agent support,” Acton had told this writer in February.
“If you are a small shop owner, and there is a bunch of people who buy from you, it will make communication easier,” Neeraj Arora, head of business at WhatsApp, explained during the meeting with Acton.
The payments piece fits right at the centre of this strategy. Already Acton is witnessing a surge in Whatsapp usage among small traders. “(While) users can stay in touch with families and their loved ones, they order grocery from their local grocer... there are stories of doctors using the product to communicate with patients,” Acton had said.