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Hundreds of millions of WhatsApp users in India will be able to pay for products and services through the messaging app, as parent company Meta seeks to generate more revenue from the messaging service in its largest market.
Starting Wednesday, shoppers will be able to purchase products and services from businesses using credit and debit cards, WhatsApp Pay and India’s public digital payments network UPI, the company said. Companies won’t be charged for in-app payments, but Meta will benefit from an increase in businesses using WhatsApp, which pay to send messages to customers.
“We are making it easier to complete purchases directly in chats,” WhatsApp said in a blog post at the Business Communications Summit in Mumbai on Wednesday.
A WhatsApp spokesperson added: “Our goal is to make it easier for businesses to let customers pay directly in chat, which will help them close more sales.”
The launch comes as the social media group seeks to promote more e-commerce on its platform as an additional revenue stream from advertising. Enabling merchant payments also allows the platform to collect more data to help it target and personalize existing ads.
This mirrors similar initiatives in Singapore and Brazil. However, India, which this year surpassed China to become the world’s most populous country, will be a bigger market than either country.
Arvind Singhal, chairman of retail consulting firm Technopak Advisors, said that WhatsApp has 400 million users exchanging messages in India every month and it has the potential to become “among the top three digital payment applications in India.”
The chat app has become increasingly important to Meta’s efforts to earn more revenue from its platform. Companies need to deliver marketing or customer service messages to customers through WhatsApp, and place ads on Facebook or Instagram to allow potential customers to directly engage in WhatsApp chats with the company.
These so-called click-to-message ads have reached a “$10 billion revenue run rate,” Meta founder Mark Zuckerberg said during Facebook parent company’s first quarterly earnings call in 2023.
WhatsApp invested $5.7 billion in billionaire Mukesh Ambani’s digital arm Jio in 2020 and launched its first in-app customer business payments with the telecom group’s e-commerce product JioMart last year Serve.
Billionaire’s daughter and Reliance Retail director Isha Ambani said last month that the number of customers shopping at JioMart via WhatsApp chat has increased “9 times” since its launch.
WhatsApp’s announcement comes just weeks after India passed its long-delayed data protection bill last month. The legislation excludes rules on corporate data sharing and is widely seen as more business-friendly than earlier drafts. Debanshu Mukherjee, co-founder of the Vidhi Legal Policy Center, said the relaxed rules are “a huge monetization opportunity” for technology companies.
In addition to facilitating merchant payments, WhatsApp has also begun to roll out the ability to transfer money between individuals, known as peer-to-peer payments, in markets such as Brazil and India in recent years, although these markets have been plagued by regulatory difficulties.
Some critics say WhatsApp has been slow to deliver on the promise of WhatsApp Pay, a peer-to-peer payments service it began testing in India in 2018 but which raised government concerns about data storage.
Ram Rastogi, who helped design UPI and is now chairman of the Consumer Empowerment Fintech Association, said WhatsApp’s progress appears to be still there even if regulatory hurdles are cleared to allow it to launch peer-to-peer payments across India in 2020. slow.
“There is nothing wrong with the product,” Rastogi said. But he added that WhatsApp has not invested in marketing efforts on the payments service because it has “no intention of achieving this goal.”
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