WhiteSight

WhatsApp says hello to the banking & payments world in emerging markets

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As digital payments and mobile wallets gain traction with growing internet access, tech biggies like WhatsApp are stepping in to fill gaps left by traditional banks. With 2 billion users, WhatsApp’s nifty setup enables instant and convenient peer-to-peer and peer-to-merchant transactions, reshaping money handling in the internet economy.

We have explored Meta’s forays into fintech and crypto earlier. In this article,  we’ll decode how WhatsApp is championing digital commerce and financial inclusion in emerging markets.

Driving digital payments in Asia

WhatsApp Pay is making some serious moves in Asia, especially in India, Indonesia, and Singapore. WhatsApp Pay joined the Indian digital payments revolution in 2018, launching under India’s National Payments Corporation (NPCI). It saw 0.31 million UPI payments in its first month, and by April 2023, transaction value hit a hefty $160M. To further accelerate customer adoption, they’ve got a cashback deal with RazorpayX, and a cool tie-up with JioMart for easy grocery payments.

WhatsApp is also putting its best foot forward in other Asian countries such as Indonesia and Singapore. In Indonesia, they’re buddying up with MC Payments, and in Singapore, they’ve got a thing going with Stripe. This makes it a breeze for businesses to accept payments directly through WhatsApp chats. 

Making its move to Latin America

WhatsApp Pay had its fair share of red tape to cut through in Brazil before it went live in May 2021. But once Brazil’s central bank gave it the thumbs up, it hit the ground running with 9 big partner banks, along with Visa and Mastercard. The initial uptake was impressive – in its launch month, transactions with Visa debit cards on WhatsApp saw a 78% rise, and the average amount spent increased by 200%.

This launch was well-timed, with Brazilians really warming up to their local instant payment service, PIX. WhatsApp is planning to integrate its services with PIX, allowing users to shift money between two accounts without needing to open their bank app to make the transfer. 

And finally, it’s time for Africa

Even though they don’t have their own payment service on the continent, WhatsApp is teaming up with local financial institutions and telecom providers to give users a way to handle money. Telkom in South Africa has rolled out a Mastercard virtual card that lets Telkom Pay customers make e-commerce payments via WhatsApp. And Nedbank, teaming up with Mastercard and Ukheshe, has launched Money Message, a feature that allows merchants to receive payments from customers directly through a WhatsApp chat.

A bumpy ride with regulators but smooth sailing with banks

WhatsApp’s venture into payments has been a challenging ride, facing regulatory hiccups both in India, where data localisation norms slowed things down, and Brazil, where the central bank raised competition and privacy concerns. 

On the flip side, banks worldwide are capitalising on WhatsApp’s ease and reach for a sleek mobile banking experience. They’re leveraging the platform’s user-friendly vibe for real-time transaction updates, account info, and personalised customer service. It’s become the go-to channel for big guns like Europe’s ABN Amro, Granati BBVA, Deutsche Bank, and Asia’s DBS, Emirates NBD, and ICICI Bank. They’re all engaging and servicing customers right where they are – on WhatsApp.

Bright future, bumps ahead on the digital payments road

The payments future looks promising, but the journey has its challenges. As WhatsApp makes inroads into digital finance, they’ll need to navigate intricate regulatory landscapes, respect privacy norms, and ensure top-notch security measures. The road ahead will demand adaptability, ethical data practices, and robust cybersecurity safeguards to truly shine.

With Meta setting its sights on dominating the digital payments world, its new motto? “Move fast, without breaking things”.

Authors

Senior Research Associate

Risav is a senior research associate at WhiteSight, where he spends his days navigating the complex fintech landscape and poring over market trends. When he's not decoding the world of fintech, you'll find this sports fanatic decoding the perfect curveball on the football field.

Founder & CEO | sanjeev@whitesight.net

Sanjeev is a fintech aficionado who loves to explore the depths of the industry as much as he loves to explore the depths of the ocean in his scuba gear. He is the founder and CEO at WhiteSight, bringing a wealth of research and advisory experience to the fintech world.

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