Recently Facebook unveiled the WhatsApp Pay feature in Brazil. Brazil contributes at least 120 million people to the total number of WhatsApp users globally. This places Brazil at number 2 globally in terms of WhatsApp market size. India is at the apex with at least 400 million WhatsApp users. The journey has been quite long given that the testing period was 2 years long. Testing was done in Brazil, India and Mexico. WhatsApp is a strategic tool for entrepreneurship given the number of people that use it. The WhatsApp Business version has at least 5 million active accounts. The world over WhatsApp is easily accessible to many – locally the existence of bundles has made it even easier. All this makes it no wonder why an in-app payment feature on WhatsApp would be a huge score. Anyways, WhatsApp Pay is here and it is part of WhatsApp’s long term trajectory.
How WhatsApp Pay Works
WhatsApp Pay enables a WhatsApp user to send or receive money in-app. It is more or less like what Sasai incorporated into their app. For one to be able to send or receive money their bank accounts must UPI-enabled. UPI enabled banks are those banks which facilitate the fund transfer through the UPI payment system. These banks allow their customers to link their bank account with a UPI enabled application. The UPI app uses a central platform to be engaged upon by various banks. Those bank accounts must also be linked to WhatsApp. It is simple because it will just be like how you normally send photos, voice notes and the like. The feature is not yet globally available. As you will see later on herein, rolling it out globally is not as easy as it might seem.
Implications For Zimbabwe
It is interesting to look at the implications of WhatsApp Pay for Zimbabwe. Let us suppose the feature were to be introduced in Zimbabwe. Would it work especially given our monetary and fiscal dynamics? To answer this question we can take Sasai as a case study. Sasai, a home-grown innovation failed to gain the traction that seemed as if would be automatic. This is a very notable development especially given that most mobile money users have EcoCash accounts. They also have bank accounts linked to their EcoCash wallets. Surely it should have been easy for payments in-app on Sasai to pick momentum. However, it has not been the case so one wonders how it will be like for WhatsApp Pay. As for Sasai, maybe the biggest setback was that not as many people as projected have started using the app. That is why it might not be accurate to conclude that in-app payments on an instant messaging app locally might not gain traction.
Back to WhatsApp Pay – this platform even presents more complex problems locally. To make payments on it requires MasterCard and Visa accounts which not many locals have. Not to mention the ever-increasing cost of data that have booted many people off WhatsApp or limited their presence on it. At least many people use WhatsApp (part of the reason why Sasai did not manage to take off strongly). This means the uptake of WhatsApp Pay would be easier if it were not for the hurdles of FCA accounts. MasterCard and Visa accounts would require one to have FCA accounts. Judging by the uncertainty of government policies people are increasingly more sceptical of opening FCA accounts. Overall, that is the biggest implication for Zimbabwe regarding WhatsApp Pay.
That does not, of course, rule out how so many people stand to benefit from the feature once it arrives here. Most people are doing business with people from all over the globe. WhatsApp Pay would make transactions much easier as they will be in-app.
WhatsApp Pay Suspended In Brazil
Barely a week after the WhatsApp Pay was officially unveiled in Brazil, the authorities have decided to suspend the feature. Effective immediately, MasterCard and Visa were directed to stop processing transactions going through the WhatsApp Pay platform. It is said that the decision is based on the fact that the Brazilian central bank wants to assess the risks of having the platform operational. This, however, is quite surprising given that WhatsApp and the Brazilian central bank were in constant touch from the onset. All in all, the move has baffled many as it is uncharacteristic for a central bank to suspend a tech innovation without a comprehensive explanation as to why.
So that is it about WhatsApp Pay – it is still to be seen how things will unfold in Brazil. I believe once the issue of the suspension is amicably resolved we can look forward to having the feature rolled out globally soon.