On June 15th, 2020, the Facebook-owned messaging service WhatsApp, launched a new payment platform in Brazil. It allows users to make payments by linking user WhatsApp account to Visa or Mastercard debit or credit card. Users will be able to send and receive money through its messaging app Facebook Pay, a payment service Facebook launched last year.
The payment service, which is currently free for consumers but businesses will pay a 3.99% processing fee to receive payment, will work by way of a six Digit PIN or Fingerprint to complete transactions. WhatsApp has built an open model to the payment service that will ensure they can onboard other partners.
WhatsApp which has amassed over 2Billion users was a place to chat and send payment details. However, with the payment service, it will be a place of actual transacting and conducting conclusive business deals, at the comfort of your smartphone.
In Africa however, I will be keen to see financial institutions that will partner with Whats app Pay to make the service acceptable and give it market penetration.
One of the Financial institutions will however be keen to further its advancement in Fintech and Technological development after scooping the prestigious, most Innovative bank award just recently, Ecobank TransnationalBank Headquartered in Lome, Togo. It will be interesting to see Ecobank partnering with WhatsApp pay once they set foot in Africa, having banking operations in 33 African countries.
WhatsApp already announcing that theirs is an open-ended model several banks will be pouncing at the chance to partner with WhatsApp, if only to increase their market share. Also, banks that have not embraced Visa in their payment platforms, if any, will need to upgrade to have a share of the pie that is Whats app Pay.
Here in Kenya,
- It will be interesting to see whether WhatsApp pay will appeal to the Kenyan people since M-Pesa has been embraced not just by Safaricom subscribers but also by banks, that it has rendered debit cards almost unusable.
- Visa also recently partnered with M-Pesa, making the option that Whats app pay is offering of linking accounts to debit or credit cards somewhat redundant in terms of competition.
It will be a wait-and-see kind of situation in Kenya, and a joy to see the marketing & selling points that M-Pesa’s Safaricom will use to muscle out the all-new WhatsApp pay.
Eventually, we are looking at Facebook expanding its Business model from chats, social media, payment service to include remittance services that will compete with major players like Money gram, Pay Pal, and Western Union.
Author: Edwin K. Gitau, CPA Finance Professional
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