In early 2020 Mark Zuckerberg, CEO of Facebook, parent of Instagram, WhatsApp and many other companies, said he expected mobile payments to start “to work in several countries And that we make a lot of progress on it in the next six months. “It has not been quite like that, since WhatsApp Pay only reached Brazil and, to top it off, its deployment was suspended a few days later by the Central Bank of Brazil.
Now eleven months later, almost nearing the end of 2020, WhatsApp has just announced the launch of its mobile payments service in India, one of the countries in which WhatsApp is most popular. The company had already tried to bring its mobile payments to India and, in fact, launched it in the testing phase, but due to certain regulatory issues it had to finally launch them in Brazil. Now it seems that everything is tightly tied in India, to the point that the system supports more than 160 banks.
Up to 160 banks for “the Bizum of WhatsApp”
WhatsApp’s mobile payment system maintains certain similarities with Bizum. It is as simple as select the bank, enter the card details and send the money to the user, who will receive it on their own account. The process is little more complex than sending a photo or a file via WhatsApp, something that a priori makes WhatsApp mobile payments a very interesting alternative.
According to the company, they have designed the payment system in collaboration with the National Payments Corporation of India (NPCI) using the Unified Payment Interface (UPI). This real-time payment system enables transactions in more than 160 banks. From WhatsApp they claim to have worked with the five large banks in India, namely ICICI Bank, HDFC Bank, Axis Bank, State Bank of India and Jio Payments Bank, although they can send money to any of the banks that support UPI.
To make the transfers it will be necessary to have a bank account and debit card in India. WhatsApp, for its part, will be in charge of sending the instructions to the bank to process the sending of money via UPI from the sender’s account to the receiver’s account. In addition to mobile payments between individuals, WhatsApp trusts that in the long term local organizations can use its system to improve the participation of the rural population in the digital economy.
The NPCI, the body that has collaborated with WhatsApp to launch the system, assures in a press release that WhatsApp “can gradually expand its UPI user base, starting with a base of 20 million UPI registered users“WhatsApp has around 400 million users in India, so surely not all users can start sending money right away.
Regarding security and privacy, WhatsApp has explained that the payments “have been designed with a strong set of security and privacy principles” such as, for example, entering the personal UPI pin for each transaction. They ensure that the system is already available on iOS and Android and, for now, the company has not commented on the launch of the function in other countries.
The mess with Brazil
On June 15, WhatsApp launched mobile payments in Brazil, but nine days later the country’s Central Bank ordered VISA and MasterCard to suspend all money transfers made via WhatsApp. The reason, the bank used at the time, was “to preserve an adequate competitive environment, which ensures the operation of an interoperable, fast, secure, transparent, open and cheap payment system.”
This measure, the bank explained, “will allow the Central Bank to assess the risks for the proper functioning of the Brazilian Payment System (SPB) and verify compliance with the principles and rules,” while “it could generate irreparable damage to the SPBespecially when it comes to competition, efficiency and data privacy. “
Source : Engadget