The famous instant messaging platform WhatsApp is going to interduce payment services. WhatsApp will launch a “full feature” payments service in India, after a test involving a million users, National Payments Corp. of India (NPCI) said.
In a statement to ET, a spokesperson of the California-based instant messaging app confirmed that it uses parent Facebook’s infrastructure for offering payments in India, but ensures that the data stored is encrypted and is not used for commercial purposes.
“We have permission from NPCI (National Payments Corporation of India) and our bank partners to use Facebook as a service provider,” the spokesperson said.
“WhatsApp is using Facebook payment infrastructure to enable the payments feature. Facebook does not use WhatsApp payment information for commercial purposes, it simply helps pass the necessary payment information to the PSPs.”
WhatsApp is also working with ICICI Bank to offer mobile payments through Unified Payments Interface (UPI). The UPI system was developed by NPCI to provide interbank transactions in India. WhatsApp payment service may be a new experience.
It is also in the process of partnering with State Bank of India, Axis Bank and HDFC Bank for payments.
Bankers in the know of the matter said WhatsApp as a third-party service provider gets only limited access to the financial data of the user. It will be able to track customer payment behavior and might be using it for their own marketing offerings.
WhatsApp spokesperson did not confirm the date when its payments offering will be available for all its customers in the country. It would not also provide the exact timeline within which other partner banks will go live on WhatsApp Payments.
The parent company of WhatsApp, Facebook is always under the spotlight for its privacy issues. So it is obvious that government will keep an eye on it.
WhatsApp, which is thought to have more than 250 million active users in India. It is currently operating a test function of its payment offering with ICICI Bank to 1 million users.
Then it will roll out the payment system for all users. The actual date is not clear but it is expected to launch soon.