Facebook has been given approval to offer its WhatsApp payments service in India, just months after it pumped billions of dollars into Mukesh Ambani’s telecoms company that is expanding aggressively into ecommerce.

WhatsApp chose India, its biggest market with more than 400m users, to test its payments service in 2018.

However, a full roll out was delayed after regulators demanded the company host its payments data in the country, rather than in the US. It also required that the business keep the information entirely separate from other Facebook data. WhatsApp said it had made changes to meet the regulatory requirements.

“I’m excited to share today that WhatsApp has been approved to launch payments across India,” Mark Zuckerberg, Facebook chief executive, said in a video. “So now you’re going to be able to easily send money to your friends and family through WhatsApp just as easily as sending a message, there’s no fee and it’s supported by more than 140 banks.”

The launch comes after Facebook paid $5.7bn for an almost 10 per cent stake in Reliance Jio, Mr Ambani’s telecoms company, earlier this year. WhatsApp Pay is expected to play an important role for JioMart, Reliance’s ecommerce grocery retailer, in its battle with Walmart-owned Flipkart and Amazon. JioMart started an online booking service with WhatsApp in April.

WhatsApp Pay will also put significant pressure on India’s payments market leaders PhonePe, owned by Walmart, Google Pay and Paytm, the Indian company backed by Alibaba and SoftBank.

Facebook is trying to facilitate more shopping on its apps, allowing it to harness new data around user spending patterns and boosting its ability to target advertising.

The company has already started to roll out Facebook Pay, a similar service, on its main Facebook platform and Messenger app. It has also launched digital storefronts on Facebook and Instagram, the photo-sharing platform, to allow for in-app shopping, and a similar feature on WhatsApp.

Mr Zuckerberg indicated earlier this year that the company planned to launch WhatsApp Pay in Indonesia and Mexico, though the company would not share a timeline.

But WhatsApp Pay suffered a bruising setback in Brazil, after regulators in the country blocked the service in June just a week after it started running, citing competition concerns.

Like its competitors, WhatsApp Pay is run on India’s Unified Payments Interface (UPI), a system developed by the country’s government that allows people to make cheap, instant transfers across bank accounts.

“Isn’t it divine timing?” said Jayanth Kolla, a technology analyst at Bangalore-based consultancy Convergence Catalyst. “It’s happening after Facebook’s Reliance deal, just in time to align with Jio Mart’s payments gateway integration.”

“Facebook is not only getting WhatsApp Pay and the Reliance Jio integration,” he said. “Now we have the most prominent internet messenger with an easily integrated payments channel. This opens up a lot of synergies for the future.”

Mr Kolla added there “could be a potential Libra play”, referring to the Facebook-led digital currency. 



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