WhatsApp is likely to explore this through partnerships with banks.

WhatsApp mulls lending to customers in India once it receives regulatory nod
Atom Digital Payments Wednesday, April 29, 2020 - 17:04

With Facebook keen on giving WhatsApp Pay a big push in India, especially following its recent investment in the Indian telecom giant Reliance Jio, the company has included lending to its customers in India as one of its objectives in the Memorandum of Association, Economic Times report quotes filings as showing.

As part of the Jio tie-up, Facebook had created a partnership with Reliance Retail wherein small businesses could use the WhatsApp platform to offer them online-to-offline commerce route. Now the company reportedly wants to extend a line of credit to these small merchants through WhatsApp Pay. This will be done through a tie-up with the banks since WhatsApp won’t enter that space.

As things stand, WhatsApp Pay had been made available to 1 million subscribers only in the country subject to it obtaining the necessary approvals from the Reserve Bank of India. There has been one sticking point – the issue of storing all data in servers within India. This is a stipulation RBI had imposed on those foreign entities (and Indian ones) which collect payment data from Indian citizens.

There are reports that NCPI was prepared to lift the number of subscribers to 10 million pending the full approval for the digital payments play. WhatsApp will be using the Unified Payments of India (UPI) platform for the digital app. UPI is being administered by the National payments Corporation of India (NCPI). The same channel will be used for the lending operations as well.

The other indication that Facebook is quite serious about the WhatsApp Pay business is indicated by its enhancing the authorised share capital of the Indian entity from Rs 10 lakh to Rs 1.6 crore.

The digital payments space in India is going to witness severe competition in the coming days with Paytm, PhonePe, Google Pay and now WhatsApp Pay vying with each other to grab a share of their customers’ wallets.

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