MUMBAI: Facebook is sending a message about money in India. The company led by Mark Zuckerberg has started rolling out a payments service there using its WhatsApp chat platform. The app’s huge popularity in the country may give it a leg up over other players.

India’s market for mobile money is already pretty crowded. Local players like Alibaba-backed Paytm have been leading the way. Reliance, backed by India’s richest man Mukesh Ambani, has joined the fray. And competition intensified when Alphabet's Google jumped into the melee. The U.S. behemoth rolled out an as yet India-only service called Google Tez which is already processing as many transactions as Axis Bank, India’s fourth-largest lender, Credit Suisse notes – though offering generous cashback deals has helped.

There should be plenty of space for a big new player, though. The Swiss investment bank reckons India’s mobile-payments market can grow at a compound annual growth rate of 130 percent to $190 billion by 2023.

And WhatsApp has another advantage: its 200 million-plus active users. They already use the app for everything from sending messages and family photos to sharing entire books and documents. Adding a payments feature may simply be Facebook’s way of getting users to spend more time within the chat app.

At present, few e-payments initiatives charge for peer-to-peer transfers. Most hope to make money by looping in merchants - WhatsApp could easily add a QR-code scanner to enable that, for example. It may also try to follow the lead of Tencent's WeChat messaging-cum-payments app in China by adding services like games, ride hailing and news.

The United Payments Interface makes India particularly appealing to WhatsApp. Launched a couple of years ago, it’s an open platform, backed by the Indian government, allowing people to send money to each other, direct into bank accounts, by linking to cell-phone numbers. That reduces a company’s cost of building its own network. That may help turn a profit eventually – but cannot be replicated in the rest of the world.

CONTEXT NEWS

- Messaging service WhatsApp has started rolling out a payments service in India. Users have been able to activate the feature, which is only available in the country, since around Feb. 12.

- The payments service is built on top of the government-built United Payments Interface, which enables money to be transferred directly between individual bank accounts linked to mobile-telephone numbers. Users can make a payment to any of their listed contacts as simply as sharing a photo or a document.

- WhatsApp has over 200 million users in India, the largest market for the chat group owned by social network Facebook.

(Editing by Antony Currie and Ben Kellerman)

© Reuters News 2018