In a bid to boost digital payments across the country, Facebook-owned WhatsApp plans to offer credit, insurance, and pension products to low-income users and individuals living in rural areas of India.
Facebook aspires to help local, small and medium-sized businesses digitize. With the move, the company plans to revolutionise digital payments in India through its huge user base of over 400 million
The platform is working to create its own digital payment service similar to Google Pay and Phone Pay. WhatsApp has been working with major banks such as ICICI, Kotak Mahindra, and HDFC to bring financial services to its platform.
With the introduction of payment service on the app, WhatsApp wants to bring these sale insurance services to individuals who are yet to come become part of the banking system said Abhijit Bose, WhatsApp’s head in India, at Global Fintech Fest conference.
Over the past year, WhatsApp’s reach has helped banks grow their operations. ICICI Bank and Kotak Mahindra, with the help of WhatsApp reach added more than 3million new users said bose.
Since the banks were able to increase their reach through the app, now platform plans to work with additional partners to provide insurance, micro-pension, and credit sale insurance services to low-wage workers and people in the informal economy in the coming year and a half.
First, the app will launch a pilot program in collaboration with its partners to test the sale insurance services among people. “Based on the results, we will co-invest and scale. Even a small conversion of the demand will translate into an infusion of significant savings into the financial system,” added Bose.
The platform is committed to open entrepreneurial ways for its users, for which it will launch many experiments. The reach of WhatsApp in rural parts of the country will be a clear advantage and youth in these places are eager to launch their own businesses.
Traditionally, banks face many hurdles to reach new customers in rural parts of the country. Low levels of presence in small towns and a heavy reliance on middlemen to sell financial services they offer have limited the reach of people.
Facebook has announced its plans to explore India’s digital platform way back in 2018. The reach of 400million users in India is unlike any app in the country which places the app at a special place in bringing the financial ecosystem to Indians.
The launch of WhatsApp Pay to a few users in the country was seen as the start of the company’s entry into financial services. However, the app has been stuck in multiple regulatory mazes that prevented in spread the sale insurance services to all Indian users.
The app has said it worked on the requirements according to the Indian central bank mandate. It says the platform will receive final approval to roll out WhatsApp Pay to Indian users.
In the Facebook-Jio deal, the company will invest $5.7 billion in telecom giant Jio and give Reliance access of its users to explore ways to help Kirana stores in the country. Kirana stores being an important part of the retail industry and the recent launch of JioMark signs some big plans.
In a recent update, WhatsApp Business added new features where users can create a catalog of the products they want to sell and show it to customers. Added new stickers such as ‘ we are open’, ‘out of sale’ to help users create shops on the app and share with customers.
Credit Suisse estimated that India’s mobile payments market could reach by $1 trillion by 2023. Many local start-ups and big giants are competing to get a slice of the growing payment market. WhatsApp is eager to join this race.