WhatsApp introduced its payments feature in beta form in India back in 2018. The feature was built on the country’s Unified Payments Interface (UPI) – an API designed, maintained, and regulated by the National Payments Corporation of India (NPCI). A few competing players in the country raised concerns about the Facebook-owned company’s system which were clarified by the regulator itself.
However, a complaint was also filed with the Competition Commission of India (CCI) against the messaging service’s payments solution plans, which argued that the firm’s dominant position in the country will provide it an upper hand over competitors. The CCI yesterday dismissed the case against WhatsApp, closing one of the two cases currently being investigated by the watchdog.
The regulatory body released a 41-page order describing the entire case that also cites the reasons why the case was being dismissed. The commission stated that it “does not find much merit in the allegation” since the payments app and messaging solutions are separate entities and that the usage of the messaging app does not directly translate into transactions.
Additionally, users must voluntarily opt into the payments app, and have complete control over their choices. WhatsApp terms the payment solution a “value-added feature to the WhatsApp messenger service”, which means that users are not mandated to sign-up for the UPI-based app to be able to use the messaging app. WhatsApp argued that the payments solution was currently “limited to less than 1% of its users in India”, and that its two offerings are “two distinct products”.
While the CCI acknowledges that the payments' offering is not dominant in any form, it does note that WhatsApp is a “dominant player” in the “market for OTT messaging apps through smartphones in India”. It adds:
While WhatsApp Pay is embedded in WhatsApp messenger app when it is downloaded by users on their smartphones, the consumers are at freewill to use WhatsApp Pay or any other UPI enabled digital payments app in India to make instant interbank transfers. Installation of the WhatsApp messenger does not appear to explicitly mandate/coerce the user to use WhatsApp Pay exclusively or to influence the consumer choice implicitly in any other manner, at present.
The company – along with parent firm Facebook – has also been accused of misuse of data. However, those allegations do not fall under the ambit of this investigation.
With this case dismissed against the messaging platform, it is one step closer to being able to launch its payments platform in the country. The firm’s troubles with introducing the offering are not limited to India. It launched its payments solution in Brazil – another market where the service is popular – in June. However, the country’s central bank suspended the service citing competitive advantages for the company.