Whatsapp Pay to transform the Indian digital economy with support of JioMart
The recent developments around Whatsapp’s notice to National Payment Corporation of India (NPCI) on fulfilling its data localisation requirements and further Reserve Bank of India (RBI) notice, has led Facebook Inc’s giant messaging platform to set its ball rolling in India’s digital payment market. While Whatsapp is yet to get an official communication from RBI, JioMart through its platform has been enabling customers to place orders through the messaging app.
“People are familiar with Whatsapp and not much with any other digital product. So, placing an order through Whatsapp is simple and convenient for consumers,” said an official from Jio.
"Our collaboration with Jio has the potential to positively impact more than 60 million MSMEs. We envision enabling people to browse the availability of shops, get answers from a business, and ultimately purchase a product right within Whatsapp chat with the business," said Abhijit Bose, Head of India, Whatsapp.
The telecom congrlomerate in its beta version commenced its operations from Navi Mumbai to understand its synergies with Whatsapp, retailers and customers. Within a few days of its launch in the market, JioMart had crossed more than 1 million downloads of its app on Google Play Store till today.
JioMart denied to reply anything further on the subject, stating its processes are still early in the market. “Top 20-30 cities in India contribute to digital payments but going forward the real impact and volume might come from the section where the next phase of e-commerce or internet commerce is coming and that is tier 4,5 cities where Jio has a big presence. So anyone shaking hands with JioMart is likely to benefit from and this is the reason why Facebook and Google are trying to get a slice through investments in the telecom conglomerate,” said Prince Poddar, Vice President, Equities, JM Financial.
In 2018, RBI said that all the foreign firms in India have to have data centres in India. Whatsapp earlier didn’t have any data centres or grievance redressal system in India, as per the public interest litigation filed by the Centre for Accountability and Systemic Change in 2018, a Delhi based think tank. As per the recent affidavit filed by RBI to Supreme Court on NPCI’s notice of Whatsapp abiding by all the data localisation compliances in the country, the financial regulator has specifically denied permission to Whatsapp to go live for full scale operations on UPI platform. In January, NPCI had received a letter from Whatsapp saying that they would complete all the pending issues by May 31, 2020.
In June this year, NPCI in its letter stated that Whatsapp has fully complied with the requirements of the RBI circular dated April 2018, so they are giving ICICI Bank the approval to go live Whatsapp on UPI.
However, “This development will have a huge impact in the digital economy of the country wherein such examples will enable stronger compliances and grievances systems further empowering the digital economy,” said an industry expert maintaining his anonymity.
Poddar said, “There is no one big player in India in the digital payments market neither in terms of company nor in terms of investors. Whatsapp Pay has the potential to change this scenario along with a backing of JioMart. But there aren’t any set rules and patterns. Digital transactions through UPI will shape the e-commerce and digital payments market in the coming years.”
As per a recent Bain & Co,. report, Indian e-commerce market is set to clock $100-200 billion in gross merchandise value (GMV) and 300-350 million shoppers by 2025. However, Indian digital payments industry is expected to reach $700 billion by 2022. In July this year, UPI based payments alone clocked 1.49 billion transactions.
