WhatsApp has rolled out support for QR based payments on the latest beta version of its Android app. A month and a half after it’s launch, the messaging app seems to be making an effort to fix its UPI based payments service’s woeful interoperability (a key selling point for UPI).
How does it work? Users can now go to the ‘Payments’ sub-menu under setting and chose the ‘Send Payment’ option they will be given two choices ‘Send to UPI ID’ and ‘Scan QR Code’. Choosing the latter opens up the QR scanner. We tried to use this with a QR code generated by Google Tez and it worked without any issues.
The latest update by WhatsApp comes a week after the National Payments Corporation of India mandated that every UPI application should be able to scan BharatQR codes and respond to merchant payment requests.
The NPCI had said that all banks running UPI applications need to adhere to such guidelines by April 16, failing which transactions will be declined for non-compliance.
“Above interoperability features must be enabled by April 16, 2018 by all BHIM UPI apps. The other compliance as per earlier circulars shall continue to be applicable. PSP bank must decline such transactions from non-compliant BHIM UPI apps after 16th April 2018 proactively. NPCI reserves the rights to decline the transactions for such non-compliant apps,” the circular stated.
Note that the new feature by WhatsApp is only limited to those who are on the beta version of WhatsApp and full compliance with NPCI’s order will require the company to roll out the feature on stable releases for both Android and iOS.
Baby steps towards interoperability
Earlier this month, WhatsApp had tweaked its payments interface to make the ‘send to UPI ID’ option more visible and accessible.
The update added two ways for a user to send money over UPI even if the recipient is not using the WhatsApp payments feature. First, the user can visit payments tab in the settings area and choose the ‘Send Payment’ option. Apart from showing a user’s contact list WhatsApp now displays a ‘Send to UPI ID’ option at the top.
When a user attempts to send money to someone, who doesn’t have WhatsApp payments enabled, over chat a ‘Send to another UPI ID’ option is now visible as well.
There were issues at launch though. We tried to send money using different WhatsApp accounts to other UPI accounts and every single time the transaction failed. We got a message saying that the transaction couldn’t be completed and my bank account was not debited. The issue seems to have been resolved now and subsequent payment attempts to UPI ID’s have been successful.
Still no password or app lock
Most UPI apps use the mobile number as a login, and Google TEZ and PhonePe both have additional passwords/pattern locks for logging in, over and above the UPI pin required for payments. Friction is a necessary inconvenience for security in payments, and you can’t do away with it, especially in a country where mobile phones get changed and stolen easily, numbers get changed. WhatsApp might want to make payments easier, but this must not come at the cost of compromising finances of users. Unauthorized access to WhatsApp can be a financial liability. There are still no signs that WhatsApp plans to add this security step.
WhatsApp’s controversial payments launch
WhatsApp launched its UPI-powered payments service in India last month to some anger over its lack of interoperability and alleged disruption of an ‘open’ system. (The openness of UPI is up for debate.)
Following the launch, incumbent payment services in India felt WhatsApp was playing by its own rules. Most vocal among them was the PayTM CEO, Vijay Shekhar Sharma. In an interview with CNBC Sharma said, “WhatsApp is killing India’s ‘beautiful, open UPI system’, and that it has gotten preferential access to UPI. He says that “it does not allow transactions to non-WhatsApp UPI handles, UPI handles created via other apps, does not include passwords and logins, and QR code scanning. Everyone else has 3 factors of authentication: login, password and then UPI pin. WhatsApp doesn’t have login and password.”
The National Payments Corporation of India (NPCI) then released a statement responding to the controversy where they said the WhatsApp rollout was a “beta launch with a limited user base of 1 million and low per transaction limit.”
This was the first we heard of “beta rollout” for any UPI application. While features have been added post-launch, the basic framework has been in place for launches by other players (Tez or PhonePe for example). A one million user rollout for a financial feature with real transactions being termed “beta” sounds… unconvincing. There is no explicit mention of the “low transaction limit” on the app. With over a 200 million monthly active user base we have serious doubts that the feature can only be accessed by only a million users, so when is the ‘beta launch’ coming to an end and when are we getting a stable release?