WhatsApp users in India will now be able to send money through the Facebook-owned messaging app after WhatsApp Pay was granted approval by the national regulator late Thursday.
The green light came just months after Facebook ploughed $5.7 billion dollars into a telecoms company owned by the country’s richest man.
WhatsApp has 400 million users in India, more than any other country in the world, but has struggled to convert those large numbers to increased profitability. Executives see WhatsApp Pay as a solution which, if successful, could be replicated worldwide.
“I’m excited to share today that WhatsApp has been approved to launch payments across India,” Mark Zuckerberg, Facebook’s CEO, said in a video. “So now you’re going to be able to easily send money to your friends and family through WhatsApp just as easily as sending a message, there’s no fee and it’s supported by more than 140 banks.”
Even with the new approval, WhatsApp faces barriers to the Indian mobile payments market. Under the regulatory approval, WhatsApp’s service will be limited to a maximum of 20 million Indians, around 5% of WhatsApp’s user base in India. That’s an increase from the 1 million users that regulators had approved could access a beta version of the service since 2018.
The National Payments Corporation of India (NPCI), the regulator, suggested in a press release that further expansions of that limit would be forthcoming. “WhatsApp can expand its … user base in a graded manner starting with a maximum registered user base of twenty (20) million,” it said.
WhatsApp Pay received a setback in 2018, when the NPCI withheld full regulatory approval, instead ruling that WhatsApp would have to store its user information inside the country, and restricting its service to 1 million users.
But events have moved in Facebook’s favor in 2020. In April, Facebook spent $5.7 billion to buy a 10% stake in Reliance Jio, a telecoms company owned by Mukesh Ambani, India’s richest man, who as recently as early 2019 had been lobbying Indian Prime Minister Narendra Modi to resist what he called “data colonization” by foreign companies.
A month after that deal was announced, Zuckerberg spoke at a Facebook shareholder meeting about plans to integrate WhatsApp Pay with Jio, which has a network of mom-and-pop stores across India. “With so many people in India engaging through WhatsApp, we just think this is going to be a huge opportunity for us to provide a better commerce experience for people, to help small businesses and the economy there, and to build a really big business ourselves over time,” Zuckerberg said. “We’re partnering with [Jio] to do some product integrations … that I think are going to be very exciting.”
Government on speed dial
Since then, links have emerged between Facebook’s leadership team in India and Modi’s ruling Bharatiya Janata Party (BJP). In late October, Facebook’s India and South Asia policy chief, Ankhi Das, stepped down from the company following a controversy in which she had been accused of intervening to stop politicians from the BJP being punished for violations of Facebook’s hate speech rules.
Das, a longtime employee of the company who had spent years cultivating a reputation of being able to secure wins for Facebook through her close ties with India’s ruling elite, had nevertheless struggled with successfully lobbying the regulator for approval.
Her departure may offer a clue to the regulatory approval’s timing. Das has been replaced (ostensibly until a full-time replacement can be found) by Shivnath Thukral. Since March, Thukral has been WhatsApp’s policy chief in India, whose key responsibility is securing regulatory approval for WhatsApp Pay. Now, he is in charge of both Facebook and WhatsApp policy in India.
Facebook and WhatsApp spokespeople did not immediately respond to a request for comment about whether the personnel changes have anything to do with the timing of the announcement.
Thukral has had closer links to the BJP than Das. He worked on behalf of the party in 2014 elections, in close coordination with its senior leadership, when the party was in opposition. In August, a TIME investigation found he had walked out of a meeting where a hate speech post by a BJP state lawmaker was flagged by an activist. The post remained online for a year despite Facebook flagging it internally as hate speech, until TIME asked about it.
Just over a week after Das left the company and Thukral assumed her role at the helm of Facebook’s India policy team, the regulatory approval for WhatsApp Pay was announced.