Explained | WhatsApp gets additional 60 million UPI users; five takeaways

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The National Payments Corporation of India (NPCI) on April 13 approved an additional 60 million users on UPI for WhatsApp. With this approval, WhatsApp will be able to expand the service to its 100 million users, intensifying competition in the digital payments space in India.

In this Moneycontrol explainer, we share five key takeaways from the move:

What is the significance of NPCI approving additional 60 million users on UPI for WhatsApp?

WhatsApp has mammoth user base. The NPCI had allowed WhatsApp to start payment services in India in November 2020 with a cap of 20 million users and subsequently approved increasing the user cap to 40 million. WhatsApp has a user base of over 400 million consumers in India and now it can directly offer payments services to a total of 100 million customers.

What is the impact on WhatsApp users?

Existing services on WhatsApp will continue for users without any changes. A wider userbase will be able to make payments using WhatsApp.

“For customers, I believe, the ease of making payments mimicking the ease of sending photographs or emojis to a friend is a good push for digital finance becoming bigger going forward,” said Amit Das, Co-founder and Chief Executive Officer at Think360.ai.

Will the limit on user cap increase going ahead?

While WhatsApp has been pushing for an increase in user cap, NPCI wanted to increase this in a phased manner so that the payment system is not overwhelmed. Going ahead, as per Das, the cap on user base will be increased as the move aligns well with NPCI’s mandates around market share.

Will payments made on WhatsApp outnumber payments via Google Pay or PhonePay in long term?

As per experts, WhatsApp’s large user base in India is a credible threat to the market dominance of GPay and PhonePe. However, the journey is still long as WhatsApp has to get the merchant ecosystem to accept payments, managing reconciliations, among other challenges.

How many transactions are being done in India using UPI service?

The Unified Payments Interface (UPI) recently breached the $1-trillion mark in transaction values for the financial year 2021-22. During the month of March, over 5.4 billion transactions amounting to Rs 9.60 lakh crore were made using the UPI service, as per latest data from NPCI.

The transaction volumes and overall recorded amount during March are the highest since the introduction of service in 2016, suggesting the scope for growth in digital payments is immense.