You’ve probably heard of WhatsApp Pay if you’ve been paying attention to the media reports concerning WhatsApp for the last 3 years or so. Alternatively named WhatsApp Payment, WhatsApp Pay is a feature that allows WhatsApp users to make payments and send money via the messaging app whilst they are chatting.
WhatsApp has been trying to launch WhatsApp Pay in India since 2018 but it’s facing so many regulatory hurdles. This pushed it to turn to Brazil for the launch of the feature but still the company is having a tough time to convince the country’s financial regulators. Before we get into too much detail about WhatsApp Pay, let’s try to understand what it is exactly.
What is WhatsApp Pay?
Like we mentioned before, WhatsApp Pay is a functionality that enables users to make payments, send and receive money straight from WhatsApp. WhatsApp Pay is revolutionary in the sense that the experience of making payments or sending money using WhatsApp is similar to that of chatting. In other words, WhatsApp Pay is an-chat payment method.
WhatsApp Pay India trials
In India, the feature was tested in 2018 in partnership with the National Payments Corporation of India (NPCI). NCPI developed one of the key pieces to enable the use of WhatsApp Pay in India – the UPI technology.
UPI is a technology that makes it possible for WhatsApp users to send money without having to provide another person’s bank account number. The sender simply needs to send the receivers UPI ID only to send money via WhatsApp Pay.
The WhatsApp Pay-UPI marriage was so good such that trials were started in February 2018 for select million people in India. However, up to know WhatsApp has not been given a green light to roll out WhatsApp Pay to the 400 million WhatsApp users in India.
WhatsApp Pay Brazil trials
Frustrated by India’s hesitance towards WhatsApp Pay, the company decided to launch the feature in Brazil, another stronghold of WhatsApp where millions rely on the messaging app for communication.
Unlike India where UPI is used instead of bank accounts in Brazil , transactions on WhatsApp Pay will be made possible through Facebook Pay. Users are required to link their Visa or MasterCard to the Facebook Pay platform to be too to make payments on WhatsApp Pay.
WhatsApp managed to convince Brazil authorities and a greenlight was given for their launch. WhatsApp Pay was launched in June in Brazil. However, it was suspended just over a week after it’s launch as a result of a directive by Brazil’s central bank and anti-trust regulator.
The good thing about WhatsApp Pay
When many people were expecting WhatsApp to make a profit from allowing people to transact using their app, it shocked them by making sending money and purchases on WhatsApp Pay free of charge. This was a selling point that was going to draw many users to use WhatsApp Pay.
For businesses, it wasn’t free all the way however. Businesses were supposed to pay a processing fee for receiving payments. But of course, businesses were going to pass on the cost of paying a processing fee to customers.
The future of WhatsApp Pay charges
Anyway, WhatsApp is probably going to use the Brazil model of not charging individual customers but businesses only when it rolls out WhatsApp Pay to other countries.
Of course, there’s no guarantee that users won’t be charged forever but WhatsApp Pay will have gained a huge chunk of market share by the time they will be charged for transactions.