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In an effort to boost revenue from its messaging service in India, Meta, the parent company of WhatsApp, is allowing hundreds of millions of Indian users to make payments for products and services through the chat app. Starting from Wednesday, shoppers will be able to purchase items using credit and debit cards, WhatsApp Pay, and India’s public digital payments network UPI. While businesses will not be charged for in-app payments, Meta will benefit from increased usage of WhatsApp by businesses, who pay to send messages to their customers.
WhatsApp stated, “We’re simplifying the purchasing process within chat. Our goal is to make it more convenient for businesses to accept payments directly in a chat, which will lead to more sales.” The move aligns with Meta’s strategy to expand e-commerce across its platforms and gather more data for targeted advertising. India, with its large population, presents an even bigger market for Meta compared to Singapore and Brazil.
WhatsApp, with its 400 million monthly users in India, has the potential to become one of the top three digital payment apps in the country, according to Arvind Singhal, chair of Technopak Advisors. The chat app plays a crucial role in Meta’s revenue generation, as companies are charged for delivering marketing or customer service messages via WhatsApp, as well as for running ads on Facebook or Instagram that direct potential customers to a WhatsApp chat with the company.
Last year, WhatsApp launched its first in-app customer business payments service in partnership with Indian telecoms group Jio. Since then, the number of customers shopping at JioMart inside a WhatsApp chat has increased significantly. The announcement of expanding merchant payments on WhatsApp comes shortly after the passing of India’s data protection bill, which is considered more business-friendly and presents monetizing opportunities for tech companies.
In addition to merchant payments, WhatsApp has also introduced features for peer-to-peer money transfers in markets like Brazil and India. However, the progress of WhatsApp Pay has been hindered by regulatory challenges. After receiving approval for peer-to-peer payments across India in 2020, WhatsApp’s growth has been sluggish, according to Ram Rastogi, chair of the Fintech Association for Consumer Empowerment group. Despite this, Rastogi believes the product itself is not the issue, but rather the marketing efforts behind it.
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