WatsApp Pay Gets Green Signal in India, With 20 Million User Cap

The National Payments Corporation of India (NPCI) announced today that WhatsApp can go ahead with the rollout of WhatsApp Pay in India. The company will be allowed to rollout in a “graded manner” the NPCI said, and it will first be allowed to do so with a maximum of 20 million registered users in UPI. To compare, PhonePe recently announced that it has hit the 250 million user mark. Ahead of this, the NPCI also announced that third party apps like these will be capped to a maximum of 30 percent of all transactions in the future, stating from January 2021.

This transaction share cap will most strongly impact Google Pay and PhonePe, both of which account for 40 percent of the UPI transactions in India, according to a recent report.

Recently, the Competition Commission of India (CCI) dismissed a case against Facebook’s WhatsApp, saying the company has not abused its dominant position to expand in the country’s digital payments market. In its order in August, the CCI said it did not find any contravention of antitrust laws, adding the company’s “actual conduct is yet to manifest in the market” as it has not fully launched the service yet.

WhatsApp Pay was expected to launch in India much sooner — an announcement was expected around Diwali last year, and many feared that the 400 million user base that the company had at the time would give it an unfair advantage.

Earlier this year, a report suggested that WhatsApp Pay would launch in May with three banks on board, but permissions had not been forthcoming. Now, with the NPCI’s green signal, the messaging platform can expand its payments operations in India, but will still see a relatively small cap on how many users it can register, when compared to the market leaders in India.