WhatsApp begins lending and insurance with a number of users that have taken Paytm, PhonePe, and Amazon years to develop


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  • Whatsapp is advancing its financial inclusion push in India as it announced its push into credit, microinsurance and micro pension products.
  • The financial services plans could add over 200 million new users to the instant messaging app, adding to the existing 400 million user base in India.
  • But with the move, WhatsApp will become a direct competitor of the existing players in India – Paytm (supported by Alibaba and SoftBank), PhonePe (supported by Walmart) as well Amazon Pay.

At a time when digital payments are on the rise in the face of the lockdown enforced by the pandemic, the future looks bright for Digital India and companies are looking for ways to take advantage of them. WhatsApp, a Facebook-owned messaging app, is the youngest vendor to drive financial inclusion in India with its foray into credit, microinsurance and micro-pension products. Abhijit Bose, Head of WhatsApp India, shared the company’s plans for financial services in India at the Global Fintech Festival.

Bose added that WhatsApp is already in talks with companies like ICICI Bank, Kotak Mahindra and HDFC to explore its financial services in India. WhatsApp is currently running pilot programs for this. “Based on the results, we will invest and scale together. Even a small change in demand leads to an infusion of considerable savings into the financial system. ”
said Bose.

With the move, WhatsApp will become a direct competitor of the existing players in India – Paytm (supported by Alibaba and SoftBank), PhonePe (supported by Walmart) and Amazon. Paytm recently launched its insurance foray and also acquired Raheja QBE General Insurance, PhonePe has partnered with ICICI Lombard to offer insurance products, Amazon Pay has just announced its insurance venture in partnership with digital insurance startup Acko.

Incoming payments from WhatsApp are 400 million users

WhatsApp already has a competitive advantage over the other players in the ecosystem as it has an existing 400 million user base. Additionally, WhatsApp’s partnership with Reliance Jio will only drive growth.

India is one of the biggest markets for WhatsApp and the app is only trying to increase its reach in the country. WhatsApp’s financial plans for the next 18 months could add an additional 200 million new users to the instant messaging app.

But this could threaten the players who have been around for a long time and are constantly building their players.

The 11-year-old Paytm’s parent company One97 Communications has a total of 700 to 800 million users, a source told Business Insider. The five-year-old PhonePe now claims to have 200 million registered users. Amazon’s user data are not publicly accessible.

WhatsApp Pay has been in test mode in India since 2018 and is faced with regulatory hurdles. But his bank of pre-existing users (via WhatsApp) will make it easier for him to break into the market. According to Bernstein’s hypothesis, WhatsApp has already captured 10.7% of the market in the first phase of the rollout since it was approved in February. The following phases will be much larger and more competitive.

Bernstein analysts expect WhatsApp Pay penetration to increase to 30% by FY25 (up from currently 10%).

“Payments remain the missing link, the connection could be a potential game changer with the WhatsApp Pay integration with JioMart,” said Bernstein’s report.

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