WhatsApp takes on Google, Alibaba in India's phone payment battle

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Sajith Sivanandan, business head, Google Pay and Next Billion User initiatives, India said: "Digital payments in India is still in its infancy and any interventions at this point should be made with a view to accelerate consumer choice and innovation".

Families and friends miles away will be able to easily receive payments from each other, without any cash or long waits at banks, all thanks to payments via WhatsApp Pay.

Google's criticism came after India's flagship payments processor the National Payments Corp of India (NPCI) on Thursday said third-party payments apps, from January 1, will not be allowed to process more than 30% of the total volume of transactions on state-backed United Payments Interface (UPI) framework, which facilitates seamless peer-to-peer money transfers.

WhatsApp has designed this payment feature in partnership with the National Payments Corporation of India (NPCI) using the Unified Payment Interface (UPI). The U.S. firm can gradually expand its UPI base starting with as many as 20 million users.

Users who have bank accounts and debit cards in India, as well as use a UPI-supported app, can transfer money directly between banks in the country.

WhatsApp's payments services will directly compete with Google Pay, PhonePe and Paytm not only when people send each other money, but when they pay for any kind of purchase using their mobile phones.

The National Payments Corporation of India (NPCI), which is an umbrella organization for operating or managing retail payments and settlement systems in the country, has given WhatsApp the green light to offer online payments services.

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The company has informed that the feature was developed with a set of security and privacy principles, including entering a personal UPI pin for each payment. The new feature is accessible via the latest stable version of WhatsApp for Android and iOS platforms.

As with all UPI services, WhatsApp Pay is free; users won't be charged a transaction fee.

Payments is available now in 10 Indian regional language versions of WhatsApp. PhonePe says they saw 835 million UPI transactions in October which translates into a market share of more than 40% of the total UPI transactions for the month.

Today, Facebook announced that WhatsApp payment feature will help Indians transferring money as easy as sending a message.

"NPCI has given approval for WhatsApp to "go live" on UPI in the multi-bank model. And because it's WhatsApp, it's secure and private too". The limit for a transaction on WhatsApp's payment service is Rs 1,00,000. For this, you need to tap on Verify via SMS.

You will then see a list of banks, from which you can select your bank.

PhonePe founder Sameer Nigam said, "We want to assure all our customers and merchants that there is absolutely no risk of any UPI transactions on PhonePe failing". One can also add a note.

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