Can WhatsApp Pay Make Inroads in the Global Payments Industry?

WhatsApp’s payment services have been in operation now for over three years. It is arguably not yet on par with rivals like Apple and Google Pay, although it is growing. One of the most comprehensive studies on the growth of mobile payments globally was conducted in 2021, and it failed to even mention Meta/WhatsApp as a significant player. However, in the last couple of years, WhatsApp Pay has seen huge growth, with a particular focus on emerging markets in India and Brazil. 

How far can Meta take this? It’s an interesting question. The general perception is that it will be difficult to dislodge Google or Apple from their dominant positions. After all, Google Pay and Apple Pay are the native payment methods for Android and Apple mobile devices. That technically gives them a first-mover advantage. People crave convenience, and it’s a lot more convenient to use an already-installed payment system on your smartphone rather than adding a new one. 

And yet, we should not forget the incredible reach of Meta’s products, including WhatsApp. In the company’s quarterly results for 2023, it mentioned that its products had exceeded over 3 billion DAUs (daily active users) for the first time. When you factor in that Meta isn’t technically available in China, it means that over half the adult population of the planet uses a Meta product – Facebook, Instagram, WhatsApp – at least once a day. The rate is much higher for MAUs (monthly active users). That reach should not be underestimated, and Meta is well aware of its potential for payments. 

WhatsApp has a dominant position in India 

We know, of course, that WhatsApp is hugely popular in India. The messaging service has over half a billion users in India, making the country – by a distance – the one with the most users. Growth has not hit the ceiling either, with some studies projecting that number to reach 800 million by 2025. The roll-out of WhatsApp Pay has also been successful, thanks to the partnership with UPI. You can use WhatsApp Pay to play at Indian online casinos, buy a cup of coffee from a café, or do just about anything you can do with a debit card. It’s convenient and secure, and seeing increasing adoption. 

Of course, WhatsApp Pay is not there quite yet in terms of being a dominant player in India or anywhere else. The last major study (as of April 2022) showed that it had exceeded 100 million users, which still lags behind Google Pay and PhonePE, which dominate transactions on the UPI service. However, consider that WhatsApp Pay is still in its infancy, and it is growing at a much faster rate than its rivals. In November 2021, WhatsApp Pay has 40 million Indian users, so it saw 150% growth in just a few months. We should note, however, that India’s complicated regulations and user caps can also hurt organic growth. 

When it comes to the global market, there is a sense of both difficulty and opportunity. Meta has always had a keen eye on adoption in developing countries, particularly in Africa. While many people in Sub-Saharan Africa remain unbanked, representing technical challenges to mobile payments without an underlying payment account (i.e., a bank), the rate of adoption of mobile payments is also incredibly high. There is an estimated 548 million registered mobile money accounts in Sub-Saharan Africa. Competition is fierce, though, with close to 200 major providers in the region. The likes of Meta, Google, and other Big Tech firms want to be dominant players. 

Political and regulatory pressures in Europe and North America

In the West, both Meta and WhatsApp face a different set of problems. There is hostility to Meta, both regulatory and political. Regulators claim they do not want to see any Big Tech company engage in anti-competitiveness and monopolies, and often their ire is turned toward Meta. Just a few weeks ago, a UK regulator ordered that Meta reverse its acquisition of Giphy (a website for creating animated gifs), citing antitrust reasons. That might seem like an inconsequential story, but you must also factor in that Meta bought the company in May 2020 for $400 million USD. Reversing an acquisition after three years is unprecedented, but it shows the hostility that some regulators in Europe and North America hold against the company. 

Still, it’s going to be interesting to see how WhatsApp pay evolves in the coming years. There is a huge opportunity for tech companies to control the global payments system as the world moves away from traditional banking. Meta faces different challenges from its rivals like Apple and Google, but it also has unique selling points that can make it a major player. 

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