WhatsApp in talks with SBI and NPCI for payment
The
messaging app, owned by American online social networking company
Facebook, is in talks with the State Bank of India, the National
Payments Corporation of India and a few other financial institutions to
integrate payments on its platform.
Messaging
application WhatsApp has initiated discussions with Indian banks and
other institutions to allow its users to make payments via United
Payments Interface (UPI), which facilitates instant fund transfer
between two bank accounts on the mobile platform.
The
messaging app, owned by American online social networking company
Facebook, is in talks with the State Bank of India, the National
Payments Corporation of India and a few other financial institutions to
integrate payments on its platform. “Due to the complexity of the
architecture, WhatsApp is in discussions with the State Bank of
India, NPCI and few other banks to devise ways to integrate their
systems with the bank and with NPCI,” a senior SBI official said on
condition of anonymity.
“We are currently at the ‘proof
of concept’ stage, looking at ways to integrate it with our back-end.”
Launched by erstwhile Reserve Bank of India Gover nor Raghuram Rajan in
2016, UPI is run by NPCI. WhatsApp is in early discussions with several
Indian banks, which could work with the messaging app service to
implement UPI on its platform, bank executives said.
With
UPI allowing instant settlement of funds between peers, all banks need
to do is to integrate their systems with WhatsApp, which can identify
the correct recipient, they said. “A messenger works in a manner of
identifying an address box where the messages travel to instantly.
Similarly, UPI instantly settles funds between one account holder and
the other,” said a senior executive, who manages payments at a private
sector bank. “WhatsApp will identify the recipient and the UPI layer
will allow funds to get settled between two parties.”
Similar
technologies have been adopted by apps such as Truecaller, which has
worked with ICICI Bank to implement UPIbased payments. Hike Messenger,
too, has started UPI-based payments in collaboration with Yes Bank. It
has done so through a wallet licence from the RBI. While messaging
applications can allow instant and easy transfer of funds, banks are
concerned over security of data in the process involved.
Some
security protocols will need to be implemented around payments through
WhatsApp. If it decides to use Aadhaar, then we will have to enable
biometric authentication,” said another executive.
Discussions
also pertain to the manner in which consumers will be able to access
the payment method, whether it will be done through WhatsApp or appear
as a payment mode in the payment gateway page. UPI, which has been at
the heart of the government’s push towards digital payments after
demonetisation, clocked 17.8 million transactions amounting to about Rs
7,000 crore in 2016-17. WhatsApp, on the other hand, has 200 million
users and a huge potential for enterprise solutions as well.
“There
is a certain amount of trust and familiarity factor associated with
WhatsApp, with so many people using it. Hence it has a huge potential,”
said Bhavik Hathi, managing director, Alvarez and Marsal Transaction
Advisory Group, a Mumbai-based consultant.
“It will also allow instant payments for businesses working through social media like Facebook.”
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