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Facebook's WhatsApp to Enter Indian Digital Payments Market?
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Facebook is reportedly contemplating venturing into the Indian digital payments market through its Internet messaging service, WhatsApp.
The company has invited applicants for the role of Digital Transactions Lead, India, on its website. WhatsApp said that it was looking for candidates with knowledge of India and its culture as well as the ability to understand and explain India’s digital payment initiatives like UPI, BHIM app and Aadhar number.
Launched in 2016, UPI or Unified Payments Interface enables instant fund transfer on the mobile platform whereas BHIM or Bharat Interface for Money is a UPI based mobile app for funds transfer.
Many analysts observe that WhatsApp’s foray into the Indian digital payments market at this point of time will benefit the company greatly. This is because the digital payments market has started gaining traction ever since the cash crunch caused due to a ban imposed by the Indian government on two of the highest denominations, INR 500 and INR 1000, in November last year. The ban came as a bid to contain the ‘black money’ menace.
India is one of the biggest markets for Facebook. WhatsApp reportedly has 200 million users in the country. A WhatsApp spokesperson was quoted by media reports saying “India is an important country for WhatsApp, and we're understanding how we can contribute more to the vision of Digital India. We're exploring how we might work with companies that share this vision and continuing to listen closely to feedback from our users."
For long, Facebook’s subsidiaries, Instagram, Oculus, WhatsApp and Messenger, have been labeled as its next big growth drivers and the company is aggressively working on monetizing the opportunities presented by them.
Facebook acquired WhatsApp in 2014 for $22 billion. The acquisition not only expanded the company’s mobile product line-up but also added a predominantly young user base. At the same time, the acquisition eliminated Facebook’s fastest-growing competitor in terms of user additions. With an estimated user base of over 1.2 billion, it remains one of most important businesses. To monetize the platform, the company has dropped subscription fees and is working on bringing “conversational commerce” to the platform.
Last year, Facebook’s Messenger provided tools to developers to enable ‘bots’ to accept and make payments within United States, thereby eliminating the need to redirect to an external website. This was aimed at enhancing commerce services as the credit/debit card details were stored on the platform and readily available while making purchases within bots. Reportedly, Facebook had collaborated with the likes of PayPal (PYPL - Free Report) , Visa, MasterCard (MA - Free Report) and American Express and others for the bot-payment feature. A couple of months back, Facebook collaborated with TransferWise Ltd., an international money transfer service that will enable users to make international transactions over the Messenger app. In the past one year, Facebook shares have gone up 24.64% compared with the Zacks Internet Services industry’s gain of 7.19%.
However, Facebook needs to be cautious of the increasing competition in the Indian digital payments market. Alibaba (BABA - Free Report) backed PayTM is one of the dominant players in the country.
Apart from established players, many smaller players are also eyeing this lucrative market. For instance, per media reports, Stockholm based Truecaller launched a feature called Truecaller Pay (only for Android platform) with its latest update. Moreover, there is an added feature which will help users to create unique VPA in the app that will help make payments using India’s UPI supported banks.
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Facebook's WhatsApp to Enter Indian Digital Payments Market?
Facebook is reportedly contemplating venturing into the Indian digital payments market through its Internet messaging service, WhatsApp.
The company has invited applicants for the role of Digital Transactions Lead, India, on its website. WhatsApp said that it was looking for candidates with knowledge of India and its culture as well as the ability to understand and explain India’s digital payment initiatives like UPI, BHIM app and Aadhar number.
Launched in 2016, UPI or Unified Payments Interface enables instant fund transfer on the mobile platform whereas BHIM or Bharat Interface for Money is a UPI based mobile app for funds transfer.
Many analysts observe that WhatsApp’s foray into the Indian digital payments market at this point of time will benefit the company greatly. This is because the digital payments market has started gaining traction ever since the cash crunch caused due to a ban imposed by the Indian government on two of the highest denominations, INR 500 and INR 1000, in November last year. The ban came as a bid to contain the ‘black money’ menace.
Facebook, Inc. Price
Facebook, Inc. Price | Facebook, Inc. Quote
India is one of the biggest markets for Facebook. WhatsApp reportedly has 200 million users in the country. A WhatsApp spokesperson was quoted by media reports saying “India is an important country for WhatsApp, and we're understanding how we can contribute more to the vision of Digital India. We're exploring how we might work with companies that share this vision and continuing to listen closely to feedback from our users."
For long, Facebook’s subsidiaries, Instagram, Oculus, WhatsApp and Messenger, have been labeled as its next big growth drivers and the company is aggressively working on monetizing the opportunities presented by them.
Facebook acquired WhatsApp in 2014 for $22 billion. The acquisition not only expanded the company’s mobile product line-up but also added a predominantly young user base. At the same time, the acquisition eliminated Facebook’s fastest-growing competitor in terms of user additions. With an estimated user base of over 1.2 billion, it remains one of most important businesses. To monetize the platform, the company has dropped subscription fees and is working on bringing “conversational commerce” to the platform.
Last year, Facebook’s Messenger provided tools to developers to enable ‘bots’ to accept and make payments within United States, thereby eliminating the need to redirect to an external website. This was aimed at enhancing commerce services as the credit/debit card details were stored on the platform and readily available while making purchases within bots. Reportedly, Facebook had collaborated with the likes of PayPal (PYPL - Free Report) , Visa, MasterCard (MA - Free Report) and American Express and others for the bot-payment feature. A couple of months back, Facebook collaborated with TransferWise Ltd., an international money transfer service that will enable users to make international transactions over the Messenger app. In the past one year, Facebook shares have gone up 24.64% compared with the Zacks Internet Services industry’s gain of 7.19%.
However, Facebook needs to be cautious of the increasing competition in the Indian digital payments market. Alibaba (BABA - Free Report) backed PayTM is one of the dominant players in the country.
Apart from established players, many smaller players are also eyeing this lucrative market. For instance, per media reports, Stockholm based Truecaller launched a feature called Truecaller Pay (only for Android platform) with its latest update. Moreover, there is an added feature which will help users to create unique VPA in the app that will help make payments using India’s UPI supported banks.
At present, Facebook has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access.Click here for Zacks' private trades >>