This article was originally published on Momentum Works’s Chinese language blog hosted on WeChat, translated and adapted for TLD here


The picture below is a passage about WhatsApp Pay in predictions for 2019 (India) made by Momentum Works in December 2018. You can access the article here.

Snippet from Momentum Works’ 2019 prediction

India is the largest market for Whatsapp, with 400 million active users. And the infrastructure, such as the unified payment interface UPI, is very mature. Surely, Zuckerberg spent a lot of time in India. In 2018, the mobile payment test of 1 million WhatsApp users in India began. It has been two years since then-in February this year, and it is now finally waiting for the approval of the Indian National Payment Company, which can expand the user scale gradually. Perhaps, Facebook’s investment of 5.7 billion US dollars in Jio is because it wants to grab this rare opportunity

And on June 15, Whatsapp point-to-point payment finally showed in Brazil.

WhatsApp official website said, “In the future, we will work to bring digital payment functions to Brazilian users and promote them to 10 million small and medium-sized businesses so that customers can not only view the merchant’s product catalog but also pay directly for the product. The payment behavior will become Simplicity helps to bring more businesses into the digital economy and open up new growth opportunities.”

Por que o Brasil?

According to its statistics, WhatsApp has 1.6 billion monthly active users worldwide, and the number of WhatsApp users in Brazil has reached 120 million, making it the second-largest market for WhatsApp in the world.

At the same time, after the long-term monopoly of the Brazilian banking giant has been gradually opened and in recent years, fintech has been very rapid in Brazil. People now have a clearer concept of mobile payment and they are willing to accept it.

Now, Brazil has become the central area of COVID-19 due to the government’s inaction, which has attracted the attention of many news from all over the world. It is actually a good choice to use Brazil as the starting station for WhatsApp Pay.

A little expensive service charge

In the initial stage, Whatsapp users need to use a credit or debit card from one of Banco do Brasil, Nubank, or Sicredi. Brazilian payment company Cielo will complete the payment processing.

Users need to link a credit or debit card to their WhatsApp account and use fingerprints or six-digit PINs for transactions to ensure security. Anyway, Momentum Works has a colleague who has previously made a mobile payment application in Brazil – fraud in Brazil is a big problem.

WhatsApp said its digital payment is an open model in Brazil and it will add more partners in the future. Consumers will not charge any fees for using the payment function, but merchants will need to pay a 3.99% service fee (not really cheap).

The future

As one of the largest social apps in the world, WhatsApp is not as full of ads as Instagram and Facebook. The simple operation method and interface have also been widely praised by users.

Although WhatsApp is relatively conservative in terms of profit model, it has made a lot of preparations in the field of mobile payment in recent years and has been focusing on the big cake of the digital economy of nearly 2 billion users.

Facebook has also been watching the e-commerce traffic. Many e-commerce transactions launched on Instagram and Facebook Marketplace have not brought revenue to the company. In May this year, Facebook announced the launch of Facebook Shops, allowing businesses to establish free storefronts on Facebook and Instagram. It is hoped that Facebook Pay will become a unified payment service for all its platforms.

It should be noted that, as a global platform, although there are many users in various countries, Facebook’s revenue in most countries may still be based on traffic.

And in the future, WhatsApp Pay (supported by the underlying technology of Facebook Pay) will not only need to face the challenges of supervision and local competitors in various countries and regions but also need to deal with the internal relations.

By the way, last year it was rumored that WhatsApp would also start a mobile payment business in Indonesia. In response, the Indonesian central bank stated that it had “never heard of it.”

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected].