Facebook-owned WhatsApp is gearing up to finally launch its UPI-based payment feature ‘WhatsApp Pay’ in India. Rumours are making rounds that the launch could take place anytime by the end of this month or early next month. However, it appears that the rollout of WhatsApp Pay is going to face another significant roadblock.
WhatsApp is alleged for abusing its dominant position to make its upcoming payment service WhatsApp Pay a grand success in India. While the antitrust watchdogs are evaluating the situation by looking into the allegations a new debate has triggered on the matter.
WhatsApp, when it comes to messaging, has a humongous user base of a whopping 400 million in India as of now. Thus, it is now being argued that if the company bundles its payment services along with its main messaging app then will it be considered as the ‘abuse of its market position’ to penetrate India’s digital payments market space?
Currently, this is being looked into by the Competition Commission of India (CCI) after a complaint was filed in mid-March.
Industry experts believe that it’s going to be a bit of tricky situation for the authorities to act upon. The allegation, while getting the facts straight about WhatsApp having an upper hand when it comes to market penetration, doesn’t have any merit when it comes to ethics. WhatsApp is not the first company which aims to introduce different offerings to its customers after being dominant in one particular niche. This is exactly how successful conglomerates are built and there is nothing unethical as such to go about it.
For instance, WeChat has followed the exact same blueprint which WhatsApp aims to implement as well to becoming China’s most successful ‘super app’. In 2013, backed by Tencent, WeChat rolled out digital payments for its users, after which, as of now in 2020, it facilitates everything from making P2P transfers to buying food, rides, clothes, flight tickets so on and so forth. Other successful examples of those who implemented a similar strategy are Amazon, Flipkart, and many others.
Even in India, two eCommerce behemoth, Flipkart and Amazon employed similar practice by creating a bigger war chest to outplay offline retailers and small competitors. Despite all the hue and cry, they continued to bolt-on additional offerings at regular intervals to make the most of acquired user base.
According to two anonymous sources, the particular complainant of this case happens to be a lawyer whose identity is still unknown. However, it’s widely believed that such roadblocks are obvious to appear as the current leading players will surely be anxious about WhatsApp debuting in the payment industry. Having a backing of Facebook and humongous user base of 400 million users, WhatsApp can easily give other competitors run for their money.
WhatsApp and Facebook along with CCI haven’t yet responded to any requests for comment regarding this issue.
This antitrust complaint that was filed additionally also alleged that WhatsApp wants to ‘forcibly’ push its payments feature on to its existing users which sounds quite absurd. At the end of the day, it is always the end-users who choose to make their own independent decisions by weighing all the pros and cons of a product or a feature. If, for example, a consumer finds that WhatsApp’s payment feature is not satisfactory or robust then they will automatically want to shift to other alternatives or stick to their previous payment app of choice when it comes to making digital payments.
WhatsApp’s payment service, when rolled out in its entirety, will be competing with the current leaders of India’s UPI based digital payment market space such as the Flipkart-backed PhonPe and Alphabet Inc’s Google Pay. These companies entered the Indian market way back in 2015 and 2017, respectively and took a long time to build their user base from scratch. However, within this span of 3-5 years, they didn’t diversify their offerings much. As a result, this is exactly where WhatsApp happened to identify a brilliant opportunity to grab a sizeable market share. Now because of this if WhatsApp happens to become a target of a full-fledged investigation then it will not be in any way considered a ‘justified action’.
This is not the first time when WhatsApp Pay is facing any legal trouble in India. Before this recent complaint, an Indian legal think tank filed a case in the Supreme Court. In the case, it was demanded that the company shouldn’t be allowed to roll out the payments service because it was violating data storage rules. That being a valid objection and a cause for concern, WhatsApp happened to assure the court that they will comply with all the necessary laws before moving ahead with the launch.
Lastly, if WhatsApp keeps facing similar unjustified setbacks to it launching the payment service in India then it will also quite simultaneously setback the growth of the UPI aka United Payments Interface in India from reaching its true potential. Many industry analysts are betting big on WhatsApp Pay to give the UPI platform a much-needed boost to further increase its adoption which will lead to bigger transaction volumes and values.
Now it remains how the Facebook-backed messaging giant chooses to respond to these allegations and then move ahead with the much-anticipated launch. We will keep you posted on future developments. Until then, stay tuned.