After two years of testing, WhatsApp payment service on Thursday, 5 November, received approval from National Payments Corporation of India (NPCI) to go live on Unified Payment Interface (UPI) in the multi-bank model.
One of the prominent discussions around this development was how WhatsApp’s UPI could eat into the market share of the existing players. WhatsApp’s entry has long been feared by rivals like Google Pay, PhonePe, Paytm and others, as it can change industry dynamics.
So, what are the key differences between the existing UPI apps and WhatsApp Pay? And where will WhatsApp have an advantage over others and vice versa?
The key difference between WhatsApp Pay and other UPI payments is the fact that WhatsApp is essentially a messaging app and none of the other payment apps come with a messenger feature.
This gives WhatsApp Pay an advantage, where the users can communicate with each other and transfer money using a chat window. However, there are several other points where dedicated UPI apps could have an advantage over WhatsApp Pay.
Cashback Schemes
UPI operators like Google Pay have been offering cashback offers for transactions. In the initial launch, cashbacks up to Rs 1,000 were offered by some of these companies.
Similar offers are available for first transactions and referrals as well. WhatsApp, however, has not announced any such cashback or rewards schemes so far.
Merchant Transfers
WhatsApp Pay is just a peer-to-peer money transfer service as of now. So far, there are no merchant payment systems offered by the company.
The other UPI services, on the other hand, have transformed the payments architecture in India using QR code payments, especially during the COVID times.
Since WhatsApp is just a peer-to-peer to money transfer service, they might miss out on the large merchant market.
Convenience of Payment
With WhatsApp being a popular messaging app, it becomes convenient for money transfer. Transfer of money between friends and family, who chat often, becomes easier using WhatsApp pay, since the payment can be done from the chat window itself and you don’t have to open a separate app.
However, the other payment apps allow you to send money to another person, even if they are not part of your contact list. But that is limited to only when the person is nearby.
Language Barrier
UPI apps like Google Pay can be operated in English and prominent Indian languages like Hindi, Kannada, Marathi, Tamil, Telugu etc. This makes it easier for the users and merchants unfamiliar with English, to operate the system with ease.
On the other hand, WhatsApp Pay supports only the English language.
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