Why  Google, Facebook And WhatsApp Want To Join India’s Payments Revolution
A worker demonstrates a mobile payment system at the Visa Inc. stand at the Mobile World Congress in Barcelona. (Photographer: Pau Barrena/Bloomberg)

Why Google, Facebook And WhatsApp Want To Join India’s Payments Revolution

Companies like Google Inc., Facebook Inc.-led WhatsApp Inc and Uber Technologies Inc. are looking to launch United Payments Interface-enabled payments systems in India, which could significantly change the digital payments space in the country.

Google may launch its payments offering using UPI within 45 days as it awaits the Reserve Bank of India’s approval, a senior official at the National Payments Corporation of India told BloombergQuint on the condition of anonymity.

The NPCI might push for three or four lenders to become sponsor banks for Google’s UPI offering to avoid monopoly, the official said. Under the RBI norms, a non-banking company needs to tie up with a universal bank to offer UPI services as they are not allowed to store any customer funds.

“We are always looking for ways to make it easy for people to pay with their mobile devices, for instance Android Pay in some countries, and continually evaluating ways to expand those capabilities to the next billion users,” a spokesperson for Google India said in an emailed statement.

On Monday, NPCI’s managing director and chief executive officer, AP Hota, first told wire agency PTI that Google had completed its UPI testing and was awaiting regulatory approval.

Uber, WhatsApp Also In Fray

Cab aggregator Uber is still in discussions to start using UPI for ride payments while Facebook-owned chat application WhatsApp is still a few months away from completing necessary testing with the NPCI, the official quoted above confirmed.

Facebook declined to comment on any product-related queries.

An Uber spokesperson confirmed that the company is working with partners to ensure that UPI payments are available to its customers very soon.

As a first step, we will look at offering our riders the option to use their existing UPI IDs to pay for their Uber rides.
Uber Spokesperson To BloombergQuint

What’s In it For Them?

It seems like a win-win situation for the NPCI and the global technology giants. The NPCI hopes to contribute to the government’s digital payments push by adding 11 billion digital transactions, out of the 25 billion transactions that the government aims to achieve by March 2018, Hota told PTI.

In June, UPI reported 10.2 million transactions worth Rs 3,070 crore, according to data available with the RBI. In May, the payments interface had recorded 9.2 million transactions worth Rs 2,770 crore. The NPCI has been aiming to reduce the average value per transaction, which is currently between Rs 2,700 and Rs 3,000.

The only way to reduce average ticket size of transactions is if more customers begin using UPI as a preferred mode of transaction. Indian banks like HDFC Bank Ltd. had tried to introduce charges on UPI transactions last month but this plan was dropped after a meeting with the NPCI.

Entry into the Indian payments space will give Google and Facebook, in particular, access to far more user data than any other engagement avenue, according to Vivek Belgavi, who heads the FinTech practice at PwC India.

“Companies that have a customer engagement business would use payments as a flanking strategy to deepen their relationship with their customers. If you see, Whatsapp is already adding to Facebook's advertising revenue,” Belgavi said.

Last month, Hike Messenger was the first chat application to go live on the UPI network. The ‘Made in India’ chat app has over 10 crore registered users.

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