Whatsapp To Become India’s First Fintech Super-App

In December 2020, Whatsapp, the Facebook-owned company aimed its focus on providing a wide range of financial services to India including credit, health insurance, and pension plans, etc. Abhijit Bose, the India head for WhatsApp, said that the company had been piloting some of these products over the past few months and these could launch by the end of 2020. With a slew of financial services about to be launched, WhatsApp can turn into one of the competitors and make its way to become another best fintech app in India. “But before exploring such possibilities, we need to understand the kind of services that must be wrapped up in a messaging app to gain that coveted status,” said Abhijit Bose.

Facebook is in continuous efforts to get the permission from financial authority of India, Reserve Bank for WhatsApp Pay. Whatsapp is all set to brace itself against its rivals Google Pay, PhonePe, Paytm, and Amazon Pay in the growing UPI-based digital payments market. According to industry surveys, Google Pay scores 40 percent market share, closely followed by PhonePe.

A super-app is a mobile platform that offers a wide range of services bundled within a single app. According to a Morgan Stanley report, the potential market for app-based fintech products could be huge, given that the super-app market size in South Asia itself is estimated to be $4 Bn. India, too, can offer similar opportunities as essential services across the economy are bound to increase. For instance, health insurance in India, a below-par 4% of the GDP (gross domestic product), is much lower than the world average of 6.31%. Hence, fintech players are eyeing exponential growth in this segment.

According to Media Reports, Facebook’s founder and CEO, Mark Zuckerberg, have interestingly and eagerly followed the spectacular rise of WeChat. Competitors like Google Pay, PhonePe, and Paytm have been focusing on growing the peer-to-merchant payment segment having their own inherent strengths. PhonePe has a formidable merchant franchise since it is backed by Walmart-owned Flipkart. Google Pay, too, has a broad ecosystem including the Google app store, which may hand it certain advantages. Merchant payments is where a lot of the existing players will compete going ahead since that shows engagement among users and the data can be used further, said Gautam Chhugani, director- financial and fintech, Bernstein Research.

Whatsapp will now be able to allow its users to send money (transfer) directly through the WhatsApp pay services using their State Bank of India, HDFC Bank, ICICI Bank, and Axis Bank bank accounts. According to the IANS report, Whatsapp can expand its UPI userbase in a graded manner starting with a maximum registered user base of 20 million, news agency IANS reported.
WhatsApp had said earlier that the payments feature is designed with a strong set of security and privacy principles, including entering a personal UPI PIN for each payment.