The approval comes two and a half years after WhatsApp launched in beta mode, but was then forced to comply with India’s data localisation requirements.
The NPCI (National Payments Corporation of India) has granted approval to Facebook-owned WhatsApp to launch payment services in India.
“Starting today, people across India will be able to send money through WhatsApp,” Facebook said in a statement on Thursday (5 November). “This secure payments experience makes transferring money just as easy as sending a message.”
In 2018, WhatsApp’s payment services launched as a beta in India, but its full rollout was delayed for two and a half years due to concerns about data storage and sharing. WhatsApp has since made changes to its data infrastructure to meet RBI (Reserve Bank of India) requirements for all data to be held locally.
The WhatsApp payments feature has been developed in partnership with the NPCI, using its real-time payment system known as the UPI (Unified Payment Interface). The feature is available in 10 Indian languages.
Customers are required to have a bank account and debit card in India to send funds using WhatsApp’s payment service, which sends instructions to banks that initiate the transfer of money between sender and receiver bank accounts via UPI.
WhatsApp is currently working with ICICI Bank, HDFC Bank, Axis Bank, the State Bank of India, and Jio Payments Bank to enable the payment service. UPI is supported by more than 160 banks.
The NPCI said WhatsApp is allowed to expand its UPI user base in a “graded manner”, starting with a maximum registered user base of 20 million customers.
The approval came shortly after the NPCI said it would impose a cap preventing any single third party payment app provider from processing more than 30 percent of all UPI transactions in a month, effective from 1 January 2021.
Currently, Google Pay and PhonePe are said to control about 80 percent of UPI transaction volumes.
A transaction limit of INR 100,000 for UPI also applies to Whatsapp.
“We’re excited to join India’s campaign to increase the ease and use of digital payments, which is helping expand financial inclusion in India,” Facebook said.
The company is said to be planning its next launches in Indonesia and Mexico, though a timeline has not yet been revealed.