WhatsApp to launch ‘full feature’ money transfer service in India

Social media website WhatsApp will launch a ''full feature'' inter-bank money transfer service in India, its biggest market, after a test involving a million users, National Payments Corp of India has said.

Friday's statement marks the de facto official launch of WhatsApp's new service as NPCI is the body set up by the central bank and lenders to oversee payment services.

WhatsApp launched a limited service in India, where it has more than 200 million users, last week. The beta service uses customers' phone numbers linked to bank accounts to facilitate payments and marks the first global foray into money transfers by the Facebook-owned firm.

Four banks will join the multi-bank BHIM United Payments Interface (UPI) model – which powers the payments service – and a full feature product will be released after the beta test is successful, NPCI said. At present, India's third-biggest lender ICICI Bank processes the fund transfers on WhatsApp, the application shows.

''Multi-bank model offer advantages such as transaction load distribution between banks and helps to integrate popular apps easily with BHIM UPI,'' said NPCI.

WhatsApp's popularity in India is likely to pose a threat to established players, but it is entering a competitive market after Alphabet Inc's Google launched a payments app last year to compete with local players.

The country's cashless economy got a boost after Prime Minister Narendra Modi-led government banned old high-value currency notes in late 2016, leading to a surge in online payment providers such as homegrown player Paytm, the biggest in India.

In a statement released on Friday, Paytm, which is backed by Alibaba and SoftBank, expressed concerns about the security of WhatsApp's new payments service.

''We follow well-defined guidelines for BHIM UPI services with the objective of making our platforms interoperable and based on open standards, convenient and secure, offering multiple choices to consumers for rapid adoption for digital payments through banks and payment ecosystem players,'' NPCI stated in a release on Friday.

Currently, NPCI has given its consent to roll out WhatsApp BHIM UPI beta launch with limited user base of 1 million and low per transaction limit. Four banks will join the multi-bank BHIM UPI model in phases (in the coming weeks) and full feature product will be released after the beta test is successful. Multi-bank model offer advantages such as transaction load distribution between banks and helps to integrate popular apps easily with BHIM UPI.

Broad principles for interoperability like ability to send and receive money through any BHIM UPI ID; intent and collect call and read and generate BHIM / Bharat QR code are required infinal BHIM UPI app. BHIM UPI enabled app which fulfils such principles only will be permissible for full scale public launch.

''We work towards providing seamless experience to users of BHIM UPI platform and recognise the contribution of member banks and non-bank entities to reach to this level,'' NPCI stated.

National Payments Corporation of India (NPCI) was set up in 2009 as the central infrastructure for various retail payment systems in India and was envisaged by the Reserve Bank of India (RBI) as the payment utility in the country. From a single service of switching of interbank ATM transactions through National Financial Service, the range of services has grown to Cheque.

Truncation System, National Automated Clearing House (NACH), Aadhaar Enabled Payment System (AePS), USSD based *99#, RuPay card, Immediate Payment Service (IMPS), Unified Payments Interface (UPI), Bharat Interface for Money (BHIM), BHIM Aadhaar, National Electronic Toll Collection (NETC) and Bharat Bill Pay.