Digital payments are quickly overtaking e-commerce, food delivery, and travel to become the primary sector for investments and innovation.
Whether local or international, tech companies of all sizes are battling it out for leadership with their payment products – Flipkart with PhonePe, Google with Tez, Amazon and Alibaba-backed Paytm, and now most recently Facebook with Whatsapp Payments.
At the center of all this stands the NPCI. The National Payments Corporation of India owns and operates all retail payments including the Unified Payments Interface (UPI), an instantaneous payment system that helps you transfer money between two parties. UPI is a one of a kind system on top of which tech companies are building their own branded payment apps.
This recent launch of Whatsapp Payments is in continuation with big tech companies making a play for India’s growing preference for UPI.
With access to over 200 Mn Whatsapp users in India, this could be a potential game-changer for UPI adoption in India building on top of what Google Tez, BHIM, and PhonePe have accomplished. A number of banks support this new payments feature, including SBI, ICICI, HDFC and Axis Bank.
What is WhatsApp Pay?
WhatsApp Pay is a mobile payment service that allows users to make payments and transfer money to other users through the WhatsApp messaging app. This UPI-based payments service is available in India.
How Whatsapp Payments work?
- Your Whatsapp and mobile number need to be the same one linked to your bank account. Since it’s a UPI based payment feature your bank should have UPI support as well.
- To enable Whatsapp payment you can either
- Click on the attachments icon in any chat and then the “Payment” icon in the menu or
- Open Whatsapp settings where you’ll see an option for “Payments” and click on it
- A list of banks supporting UPI opens up. From the list provided choose the bank that you have a UPI linked account with already.
Incase you haven’t linked a bank account with UPI, Whatsapp offers an option to do so within the app. After selecting the bank, you would have to add details of your debit card and generate a fresh UPI PIN. You are now good to go and make your first payment.
- For the transaction to happen, choose any one of your contacts to whom you want to transfer an amount, Click on the ‘Attachment’ option where you’ll see a send money icon. Enter the amount and your UPI pin to complete the payment.
Disclaimer: The IOS app only allows you to transfer money to another person with WhatsApp payments whereas the Android app allows you to transfer money to anyone with a UPI id.
Despite Whatsapp being effortlessly seamless and not to mention an extremely convenient P2P payment method, is it really what your business needs?
Whatsapp payments can give wallets, cash, and other UPI based apps major competition. Their entry into space primarily threatens digital wallet companies, as the instant messenger counts over 200 million users in India. Also, there is near to zero cost of customer acquisition for Whatsapp.
However, the P2P payment platform lacks the technical advances that allow a business to manage payments. A business needs more than just a payment platform to function. A business needs help with calculating total collections, managing refunds, and settlements.
A business needs redundancy and notification in case payments are not completed or have** failed. A business which needs to collect payments should have backup options to pay via Cards, Netbanking, Wallets, whatever else is needed in case their customers are not currently setup with a UPI account and don’t want to do so for now.
Providing such powerful payment acceptance and management solutions for businesses is something we do extremely well here at Razorpay.
To summarise, Whatsapp as a payment platform isn’t currently powerful enough to replace their payments provider but a great solution for sending Peer-to-Peer payments to someone you know or your friendly neighborhood store. More clarity on how Whatsapp Payments will integrate with Whatsapp for Business is needed to see how businesses can use this platform.
Razorpay, like always, will be on top of these developments and you can keep checking this space for frequent updates regarding Whatsapp Payments.
How to Send money on WhatsApp Payment
Here are the steps to be followed to send money on WhatsApp:
- To send money on WhatsApp, first, open a chat with the person you want to send money to. Then, tap on the attachment icon and select “Payment” from the options.
- Next, tap “Add Payment Method” and follow the instructions to verify your phone number and link your bank account.
- After your bank account is linked, enter the amount you want to send.
- Add a note if you want to put in any remarks.
- Finally, enter your UPI PIN to confirm the transaction.
That’s it! It’s a quick and easy way to send money to friends and family through WhatsApp.
How to Receive Money in WhatsApp Payments
Here are the steps to receive money on WhatsApp:
- Open the chat with the person who is sending you the money.
- When he sends you the payment, you will receive a notification from WhatsApp with the amount.
- To accept the payment, tap on the notification and enter your UPI pin.
- Once the payment is accepted, the money will be credited to your linked bank account.
Features and Benefits of WhatsApp Payments
Here are some of the features and benefits of Whatsapp payments:
- Secure: The payments feature is end-to-end encrypted, ensuring that all transactions are secure.
- Convenient: Users can easily send and receive money directly through their WhatsApp chat, without having to switch to another app or payment method.
- Multiple Payment Methods: Users can link their bank accounts or debit cards to the app, allowing them to choose the payment method that is most convenient for them.
- Instant Transactions: Transactions are processed instantly, so users can send and receive money in real-time.
- No Fees: There are no fees or charges for using WhatsApp Payments, making it a cost-effective option for sending and receiving money.
Frequently Asked Questions
Is WhatsApp Payments safe?
WhatsApp payments are secure and safe as they use a secure and encrypted connection to transfer money. However, it is recommended to take necessary precautions such as verifying the recipient’s details, enabling two-factor authentication, and avoiding sharing sensitive information with others to ensure the safety of your transactions.
Where do I find the payments option on WhatsApp?
To send or receive payments on WhatsApp, simply open the chat of the person you want to transact with. Just tap on the attachment icon and select ‘Payment’ from the options. After that, just follow the instructions to link your bank account and send or receive money.
What is the maximum amount of money that can be transferred via WhatsApp Pay?
You can transfer money using WhatsApp Pay up to 20 times in a day to a single Virtual Payment Address (VPA) or multiple VPAs. The maximum amount that can be transferred in a day is Rs. 1 lakh.
How much does WhatsApp charge for payments?
WhatsApp Payments are free and there are no transaction fees.
Does WhatsApp payments work internationally?
WhatsApp Payments is currently accessible in select countries and compatible with specific devices. Users in India and Brazil have the option to utilize this feature, enabling them to conveniently transfer funds among their friends, family members, and even make payments to registered businesses.