WhatsApp is the most popular messaging app in India, with over 200 million users. This is big considering the country has a population of more than 1.2 billion. India, in fact, is WhatsApp’s biggest market in any other country. To capitalize on this, the company is reportedly planning to launch a digital payments service in the country any time in the coming months of this year. The move was actually first reported by local media in India, with a spokesperson for the company later explaining in an interview with Bloomberg that WhatsApp wants to “contribute more to India’s vision for digital commerce because it sees the country growing in the technology world.”
What exactly WhatsApp will offer users in India isn’t clear yet at this point. However, the move is seen as quite logical, perhaps even necessary fir a country with such a huge population. Facebook acquired WhatsApp in 2014 for $22 billion, and the app has continued to grow in popularity and now boasts more than 1.2 billion users. But, it has yet to find a way to monetize its user base. WhatsApp once did charge an annual $1 subscription fee, but this was dropped in 2016 because it was seen as a barrier to user growth.
India is presently experiencing a boom in mobile payment apps because of its large overseas and interprovincial workers who need to send money back home to the family. Last year, the government announced plans to demonetize large denomination bank notes in an effort to crack down on tax evasion, counterfeiting, and government corruption. Old monetary notes could be exchanged for new versions. But this led to a shortage in notes in a country where cash is still very much king, and, subsequently, an increased interest in mobile payment apps.
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WhatsApp is, based on some aspects, more popular in India than Facebook, and the messaging app has already been adapted to play unexpected roles in the country’s economy. Analysts from other countries are amazed at seeing WhatsApp used informally to sell goods. You can actually see people selling baby clothes, medicines, art and craft supplies, on the app, and it has become a sort of Craigslist type of offering in India.
In January 2016, digital payment services in India clocked up more than 262 million transactions worth some $1.3 billion, according to the Reserve Bank of India. This number is up from the 100 million transactions last October of 2015. The government has also launched its own digital payments framework for digital payments, the Unified Payments Service, to foster this growth, letting banks and mobile apps easily exchange currency. If WhatsApp does launch a payment service, it will have certainly picked the right timing for such a venture in India.