WhatsApp Pay in India has been in the anticipation of approval for a very long time. The digital payments feature by the social media platform should have been introduced in the country much sooner. But it had to go through a delay due to some false messages doing the rounds on the platform. Those led to mob lynching and more government inspection was needed as suggested by some reports.
In the due course of time, the Facebook-owned messaging giant was also trying to act in accordance with the Indian regulations with data storage norms that would require all payments-related data to be stored locally. Now it has received approval by the regulatory NPCI and it can now go ahead with the rollout of its service in India but in a graded manner.
National Payments Corporation of India (NPCI) has given approval for WhatsApp to ‘Go Live’ on UPI in the multi-bank model. As per the announcement, the social media platform can now expand its UPI user base in a graded manner starting with a maximum registered user base of twenty (20) million in UPI.
We should add here that millions of users in the country have been distributed among Paytm, Google Pay, PhonePe and other digital payment services but only WhatsApp has more than 400 million user bases in India itself and this would definitely make a strong dent on the payments ecosystem.
WhatsApp Pay would pose as a big competitor to Paytm, which is one of the most used and popular digital payment apps in India.
Apart from this considering the recent growth in UPI transaction volumes, NPCI has analyzed the risks in the UPI ecosystem. To address the risks and protect the UPI ecosystem the regulatory has now announced to impose 30% on the total volume of UPI transactions processed by Third Party App (TPA) providers that will come into effect from January 2021. This decision will mostly affect Google Pay and PhonePe as they are said to be dominating the UPI ecosystem. As per a report these two companies have around 40 percent of the number of transactions each. In addition to this existing TPAPs (i.e. TPAPs that are live as on the date of this circular), who are exceeding the cap will have a period of two years from the aforesaid date to comply with the same in a phased manner.
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