Earlier this week, The Ken reported that Facebook-owned Whatsapp is entering the payments business in India, working on launching a peer-to-peer payments offering, expected to be built on the UPI, in the next six months. Some thoughts on this development: 1. Whatsapp is a telecom operator: Whatsapp has been built on the idea of replacing telecom operators by providing the services that telecom operators do. They started with messaging (a telco service), then moved to voice calling (a telco service), and now are doing video calling (a telco service which telcos failed to do). The monetization plan that Whatsapp - which has still not been rolled out - been about providing transactional messages, which is another telecom service. As such, we've always seen Whatsapp as a telecom operator riding on the Internet protocol. With telecom operators getting into payments, it's not surprising for Whatsapp to get into payments. The only anomaly in the feature rollouts from Whatsapp is the introduction of status messages, which telecom operators don't (and can't) do. I wonder if Whatsapp would have done status messages if it weren't owned by Facebook. 2. Whatsapp will be want to be just a pipe: Companies getting into payments in India have 3 options for enabling transactions: They can become a wallet: The thing to remember with wallets, is that they're a storage of money: you own the customer because she holds money with you. Wallets, in that sense, are a threat to banks, because they're an alternate store of money. Starting a wallet, however,…
