Here’s How To Activate And Use Payments On WhatsApp

How WhatsApp will change the payments landscape in India...

People are seen as silhouettes as they check mobile devices whilst standing against an illuminated wall bearing WhatsApp Inc’s logo (Photographer: Chris Ratcliffe/Bloomberg)
People are seen as silhouettes as they check mobile devices whilst standing against an illuminated wall bearing WhatsApp Inc’s logo (Photographer: Chris Ratcliffe/Bloomberg)

If you’re one of WhatsApp’s over 200 million users in India and if you’ve linked your bank account to your mobile phone number, you’ll now be able to use the messaging application to transfer and receive money.

Facebook-owned WhatsApp, in one of its recent updates for both iOS and Android versions, allowed some users to activate the payments feature. The service rides on the back of the National Payment Corporation of India’s Unified Payments Interface. The feature has been launched exclusively in India.

To use Payments, you must use a phone number with the country code for India and have a bank account with a bank that supports UPI. The phone number you use for our services must be the same phone number linked to your bank account used for Payments. 
WhatsApp Payments Terms And Conditions

If you satisfy the necessary pre-conditions and wish to avail the service, search for a ‘Payments’ tab in the ‘Settings’ drop-down within the application.

And if you can’t find the ‘Payments’ option, don’t fret. There’s an easy fix. Simply find someone who’s activated the payments feature and get them to try and send you funds.

The next time you access your settings in WhatsApp, you should see a ‘Payments’ tab. At some point, this option will be available for all eligible WhatsApp users. And it requires users to be at least 18 years old.

Once you’ve selected the ‘Payments’ option, you’ll run through a series of steps:

  • Add a bank account. The application will then give you the option of adding a new account. You’ll be asked to accept the terms and privacy policy of WhatsApp Payments. As an informed user, be sure to go through these.
  • You will then be asked to verify your phone number with an SMS. A few seconds later, a list of the bank accounts linked to your mobile number will show up. Select any one to continue.
  • The next step is to verify the debit card that’s linked to your bank account.
  • And finally, you’ll have to enter a one-time password that’ll be sent to your mobile number, and choose a UPI PIN, which you will use each time you transact.

To send money via WhatsApp Payments, simply select a new chat with a person that has activated the payments service. On your Apple phone, you’ll find the ‘Payment’ option under the ‘+’ dropdown. On Android devices, this is available under attachments.

The Changing Payments Landscape

The launch of WhatsApp’s payment service comes about five months after software giant Google launched its Google Tez application. Tez, like WhatsApp, uses UPI.

While WhatsApp’s service can only be used to send money to registered contacts, Tez allows a user to transfer funds to any bank account using one of many options, including an account number and branch code, mobile number, or UPI identification.

Similarly, PayTM and other mobile wallets continue to have their avid proponents.

The introduction of the WhatsApp payment service will likely eat into the market share of others in the peer-to-peer space, said Vivek Belgavi, partner, financial services at PwC. It will be much more difficult for WhatsApp to make a dent in the online-to-offline space, he said.

An online-to-offline service uses e-commerce solutions to offer services, or discounts to nudge customers towards offline or brick-and-mortar stores. “The battle grounds have now shifted from the classic peer-to-peer remittances to online-to-offline models,” said Belgavi.

Agreed Bipin Preet Singh, founder-chief executive officer and director of mobile wallet company MobiKwik. He expects that the launch of WhatsApp’s payment service will increase adoption of UPI and lead to more customer education. Singh doesn’t see it having a major impact on what he calls the person-to-merchant space. That, Singh explained, includes both online-to-offline and online-to-online payments.

We don’t consider P2P payments to be of much value. I’d go to the extent of saying that. Though we provide a mechanism for people to transfer money to other MobiKwik accounts and bank accounts, except at the time of demonetisation we never saw a huge need for it. Our business value is created by use cases.
Bipin Preet Singh, Founder-CEO & Director, MobiKwik

The use cases, Singh said, are where customers use a mobile wallet to pay for a product or service. In the online world, this would include payments on applications like Swiggy or Foodpanda, while in the offline space, it would take place through a QR code or a point of sale, he said. That requires a lot of work on the ground to acquire merchants, he said.

Irrespective of that, it’s clear that digital payments could well get a boost simply because of WhatsApp’s tremendous reach.

After a slow start, payments on the NPCI’s UPI platform have gathered momentum. Since April last year, they have grown every month, with significant spurts since October. In January, the NPCI said the value of UPI transactions stood at Rs 15,540 crore.