Post the launch of Google Tez last year, the UPI transactions increased by eight times to 150 million transactions. Paytm also launched its UPI-based app which had a similar effect as the digital volumes risen. According to Paytm, it experiences more transactions than the State bank of India in a month. Currently, Whatsapp is testing the Beta version of the BHIM UPI for P2P payments while Amazon is testing Amazon Pay. Even the banks have started launching wallets along with their own UPI apps in order to keep up with the Fintech players so as to retain their customers.
This transition towards the digital ecosystem is what the National Payments Corporation of India wants. The founder of Paytm, Vijay Shekhar Sharma is not complaining about the UPI product of Whatsapp for its lack of a level playing field. The Reserve Bank of India will not support Whatsapp or Google with fewer authentication factors as it would Paytm. Also, banks will first need to make sure that there are risks in allowing money transfers using these apps. For example, if ICICI Bank is becoming Whatsapp’s partner, then it should take care and see to it that the bank and all its customers are secure.
In case the consumers start making payments with Whatsapp more as compared to Paytm, it will be due to the app being very popular and the process being easy to follow. Similar to China where the digital payments are popular and integrated with e-commerce and social platforms, a similar trend can be seen in India. This is also one of the easiest ways of transitioning to a digital ecosystem for the customers. The digital payments market will grow to nearly $ 1 trillion in the coming five years from a current amount of $ 200 billion. But, for this to happen, the systems should be totally secure and no regulator should risk a failure.