WhatsApp ties up with RazorpayX to boost ‘cashback’ transactions via UPI
Facebook-owned messaging platform WhatsApp has partnered with RazorpayX, the neo-banking arm of Razorpay, to enable and boost its cashback system via UPI (Unified Payments Interface). As part of this, users using UPI make payments on WhatsApp and receive cashback; and RazorpayX helps ensure smooth transactions.
In April, WhatsApp received approval from the National Payments Corporation of India to open UPI services on its messaging platform to 100 million users. Earlier, WhatsApp Pay had been allowed to extend payment services to 40 million users only.
WhatsApp seems to have launched an aggressive cashback strategy to emerge as a serious challenger in the payments space. The new strategy launched a couple of weeks back, is aimed at dramatically increasing the daily transactions on the platform. While WhatsApp -- the most popular instant messaging application in the world -- holds just 0.04% market share in the digital payments segment, PhonePe and Google Pay lead the pack with 47% and 34% market share, respectively.
Since UPI has a vast adoption across the country, RazorpayX says it will help provide a seamless and reliable cashback experience to users.
Harshil Mathur, co-founder & CEO, Razorpay, says India’s preference for instant digital modes of payments has grown exponentially, and payments on WhatsApp will play a key role in financial inclusion for its 500 million users. "We are excited to power the first cashback effort on Payments on WhatsApp as they embark on this journey."
WhatsApp India director-payments Manesh Mahatme says WhatsApp is often the first digital gateway for Indians, especially those in rural and semi-urban areas. "Offering safe, secure and easy-to-use digital payments is an important part of scaling India’s digital economy, and we’ll continue to drive awareness of payments on WhatsApp as part of our broader efforts to bring the next 500 million Indians onto the digital payments ecosystem.”
Also Read: 40 Under 40: Razorpay’s phenomenal growth
RazorpayX serves over 30,000 businesses. In the last year, it processed UPI transactions for over 20% of all UPI registered users in India.
The payments service on WhatsApp was formally launched in 2020 after the Meta-owned messaging platform ensured compliance with regulations, including storage of transaction data locally. At the time of launch, WhatsApp Pay was allowed to be rolled out to only 20 million users in India. This number then increased to 40 million last year. The allowed user base has now been increased by 60 million to a total of 100 million.
The current limit on the user base for WhatsApp Pay in India, however, remains way below its total number of subscribers – over 400 million – in the country.
Besides, UPI is India's largest payments mode, which has crossed the $1-trillion mark in transaction value for FY 2021-22. The payments system crossed 5 billion transactions in a month for the first time in March 2022. Within five years of its launch, over 50% of retail payments in India are routed through the UPI platform. The value of transactions on the UPI crossed the ₹10-lakh crore mark in May 2022. The payment interface processed 595 crore transactions worth ₹10.41 lakh crore in May this year from 558 crore payments amounting to ₹9.83 lakh crore in April 2022, the NPCI data shows.