Come February, sending money could be as simple as sending a text message. Instant messaging platform WhatsApp may make its digital payment debut in India next month, The Economic Times reported, citing two people familiar with the development.
According to the report, the Facebook-owned chat app is working with top lenders including State Bank of India, HDFC Bank, ICICI Bank and Axis Bank to integrate a Unified Payments Interface-based solution.
UPI is a real-time payments system developed by the National Payments Corporation of India (NPCI) that enables digital transactions between banks.
“The platform is already in beta stage (testing) with one of its partner banks," the report quoted one of the above-mentioned persons as saying. "We expect the product to go live for consumers by the end of February, depending on how the trials work out.â€
The report also quoted an unnamed banker who said security tests were being conducted. Once this is done, the system will be integrated and tested out among some beta users before being rolled out to the public.
WhatsApp had not yet responded to queries from VCCircle at the time of publishing this report.
There has been a massive surge in digital transactions since the government decided to take 86% of the currency out of circulation in November 2016. According to NPCI data, electronic payment transactions crossed the one billion mark last month.
WhatsApp has than more a billion active users. India is the US-headquartered company's biggest market, with more than 200 million users.
WhatsApp co-founder Brian Acton had met India's IT minister Ravi Shankar Prasad in February last year, following which the company received approval to integrate UPI.
Security and privacy
Bankers have highlighted that different levels of encryption will be required. WhatsApp already has a 256-bit encryption in place to bolster security. In addition, UPI has a three-factor authentication process.
Leading digital payments platform Paytm also offers peer-to-peer money transfer via messaging. The company recently allowed UPI transactions as well.
Kavin Bharti Mittal-founded Hike also has a wallet feature that allows peer-to-peer transactions.
Another likely concern is that WhatsApp will collect metadata and use it to send targeted advertisements.
In such an event, an industry expert was quoted as saying that WhatsApp would need "to implement a change in its privacy policy indicating clearly that they will drive targeted adverts just as its parent company Facebook does."
The report quoted a banker as saying that UPI has a "complicated settlement mechanism between banking partners" and such issues must be ironed out before the service is launched.
WhatsApp is also said to be in talks with companies like online ticketing platform BookMyShow to join the app's payments interface.
Google, which rolled out its Tez payments app last year, claimed in December that it had acquired 12 million active users within 10 weeks of launching in India.
