WhatsApp, the social messaging service owned by Facebook, started testing its peer-to-peer mobile payments service in India last week. The payments platform is not official yet. But it’s already raising alarm bells for security infringement in the Indian tech community.
WhatsApp’s peer-to-peer payment service has the ability to bring a disruption of scale in India’s cash-driven economy. WhatsApp has over 200 million monthly active users in the country and the ease of use of its payments platform has the capability to transform all of those users into digital banking users and its most immediate victim could be Paytm, the home-grown digital payments provider.
Paytm was one of the first to welcome WhatsApp into digital payments segment but its founder Vijay Shekhar Sharma soon raised concerns around the implementation of WhatsApp Payments. In an interaction with BGR India, Deepak Abbot, Senior VP at Paytm explained that the company is not complaining about the competition and it respects healthy competition. But Abbot raised concerns about Facebook-owned WhatsApp not implementing password protection features which is mandatory as per National Payments Corporation of India (NPCI). WhatsApp also currently does not allow users to send money to a non-WhatsApp user, which is against the basic guidelines of NPCI.
Now NPCI has responded to concerns of Paytm and general behavior of WhatsApp Payments built on top of BHIM UPI interface. In an emailed statement, NPCI says that it has been working to facilitate digital payments with products like Bharat Interface for Money – Unified Payments Interface (BHIM UPI) and it has a well-defined guidelines in place for making the UPI platform interoperable.
On WhatsApp Payments, NPCI said that it has “given its consent to roll out WhatsApp BHIM UPI beta launch with limited user base of 1 million and low per transaction limit. Four banks will join the multi-bank BHIM UPI model in phases (in the coming weeks) and full feature product shall be released after the beta test is successful. Multi-bank model offer advantages such as transaction load distribution between banks and helps to integrate popular apps easily with BHIM UPI.”
While Paytm’s concerns are not unwarranted, it is worth noting that NPCI has a fair knowledge of how WhatsApp is implementing its payment platform. The National Payments Corporation of India also adds that BHIM UPI enabled apps will be permissible for full scale public launch only when they support broad principles for interoperability like a) ability to send and receive money through any BHIM UPI ID b) intent and collect call and c) read and generate BHIM / Bharat QR code are required in final BHIM UPI app.
WhatsApp Payments would not have reached even 1 percent of its user base in the country and it is likely that the service will add these broader features/measures as it becomes available to more users.