As mobile wallet companies face the heat of Reserve Bank of India’s KYC norms, instant messaging apps have been leveraging their popularity and stickiness to expand into payments. Facebook-owned WhatsApp recently launched its UPI-based payment feature and a separate WhatsApp Business app. It is not the only player to tread this path; last year we saw Hike and Truecaller joining the UPI bandwagon with P2P (peer-to-peer) offerings, with Hike also offering services such as Ola Cab and Auto, bus tickets and bill payments. Conversely, Google has also announced a chat feature for its UPI-based payment app, Tez, to take on Whatsapp.
“We believe every transaction between people happens after a conversation, whether it’s over a call or SMS. The idea behind Truecaller Pay was to create a solution that seamlessly integrates transactions with conversations on a unified platform,” says Alan Mamedi, co-founder and CEO, Truecaller. The platform has more than 150 million users in India.
Globally, WeChat in China, also known as the bellwether of the mobile messaging space, has built a whole ecosystem of services around itself. What’s more, Facebook Messenger also announced a tie-up with PayPal for P2P payments in the US last year.
The closer payments is to your engagement platform, the higher the possibility of adoption. Messaging apps have very high engagement levels. For example, WhatsApp currently has over 200 million monthly active users in India. “WhatsApp is the most integrated solution on smartphones. Data suggests as many as 80% of Indian SMEs think that WhatsApp helps them communicate with customers. With payment features being added, WhatsApp has the potential to disrupt the mobile pay market,” says Shrenik Gandhi, co-founder, White Rivers Media.
The entry of messenger apps will benefit by customer education done by the incumbents, mostly mobile wallet players. “Within four-five months of the launch, Google Tez has overtaken Paytm in terms of total payment value. Wallets are going to face difficult times as consumers get more comfortable with UPI,” says Ujjwal Chaudhry, engagement manager, RedSeer Consulting. Furthermore, there is a difference of four-five times in the average transaction value of the wallet versus UPI payment.
“With UPI, National Payments Corporation of India has built an asset-light infrastructure. So players like WhatsApp, Google’s Tez and Paytm are looking to leverage it, but consumers adopt what they find useful. It doesn’t matter if you have a huge consumer base. It is a matter of value and how you make your service work,” says Deepak Chandnani, MD, Worldline, south Asia and Middle East.