It appears that everyone is handing Facebook bad news these days. Facebook has been piloting a payments service embedded in its message app, WhatsApp, in India for some time. They have attracted over 200 million users and are ready to launch the payments capability and compete with other entrenched players like Paytm. The government is holding up the payment service’s debut, waiting for Facebook to prove they have solve issues around the sharing of “fake news”. Mysmartprice posted the following background on the topic:
WhatsApp has been reportedly engaged with the Indian government, National Payments Corporation of India (NPCI) and multiple banks to spread its payment service around the country. However, the Indian government currently wants Facebook-owned chat platform to focus more on curbing fake news citing numerous lynching incidents happening across the country. Although WhatsApp has recently added the “forwarded” tag for the viral messages to indicate their source, it seems that the Indian government wants it to come with more measures and prioritize it over its plans of launching the payments service. It seems that the rising cases over fake WhatsApp messages have become a roadblock for its plan of launching the payments service in India.
Other roadblocks have showed up in the form of concerns raised by financial institutions of India such as RBI. The primary concern is how and where WhatsApp’s payment service will store user’s data in accordance with RBI’s instructions, which is mandatory. The Indian government is reportedly awaiting clarity over such concerns from WhatsApp. It may take longer time to examine the service as WhatsApp has a huge user base in India, over 200 million users.
India represents an important market for Facebook and their payments service. Where embedded Facebook payments capabilities in the U.S. have their place, the real growth market is in Asia where the market is more open to digital payments.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group
