Will WhatsApp's India move drive mobile payment competition or too little too late?

Written by Shannon Beets || January 03 2018

Previously, WeChat has been the world's dominant chat & payment app with over 1 billion WeChat users worldwide, spread over 15 countries; 200 million of which use the app's payment function. Could WhatsApp's December 2017 release of a payment enabled WhatsApp app in India find similar success? 

WhatsApp has already partnered with the three biggest banks in India, the State Bank of India, ICICI Bank and HDFC Bank and will integrate payments right into the WhatsApp user interface. India's WhatsApp user base represents 21% of the 1.3 billion users that access WhatsApp in 109 different countries. As a comparison, only 70 million of WeChat's 963 million monthly active users reside outside of China. Because of the similarities between the two, predictions are that WhatsApp may be as successful in India as WeChat has been in China.   

Mobile Payments in India is not a new concept with payments growing in usage after the demonetization policy in 2016 removing 86% of the cash in circulation. This helped India's Paytm, also a mobile payment platform, to increase transaction volume. Paytm, founded in 2014 was India’s first 100 million user product as of August 2015 and continued to grow reaching 177 million in December of 2016 then 230 million users in February 2017. A 29.94% growth in the 3 months after the demonetization.

With Paytm’s market size in India at more than 230 million users and WhatsApp’s market size at 200 million there’s the possibility that a large share of the Paytm’s market will transition to WhatsApp purely for the convenience. With the combined features of chat and payment on WhatsApp it would be likely that users begin to disregard Paytm as they continue using WhatsApp.

In terms of combining communication and payments if anyone is going to challenge WeChat’s exclusive control, WhatsApp is the perfect contender, due to its experience in mobile and could be the beginning to a WhatsApp-driven payment revolution.