Meta-owned popular messaging platform, WhatsApp has secured regulatory approval to double the number of users on its payments service in India to 40 million, according to a source related to the matter.
Earlier this month it was reported that the company had requested to remove the cap on the number of users of its payment service in India. Instead, the National Payments Corporation of India (NPCI), which operates the country’s retail payment and settlement systems, allowed the company it can double the user base to which it can offer its payment service, currently restricted to 20 million, the source said.
The new cap would still restrict the company’s growth prospects in India, given that WhatsApp’s messenger service has more than 500 million users in the country, the company’s biggest market. However, it was not clear when the new cap would come into effect.
Since Whatsapp has a huge user base, lifting the limit for the payment service in one go may lead to extremely high transaction volumes on NPCI’s platform. Currently, NPCI is planning to increase the cap in a phased manner because it cannot handle the large volumes that might come, the source added.
In India’s crowded digital market, WhatsApp competes with Alphabet Inc’s Google Pay, SoftBank and Ant Group-backed Paytm and Walmart’s PhonePe.
The NPCI gave WhatsApp approval to start its payments service last year after the company spent years trying to comply with Indian regulations, including data storage norms that require all payments-related data to be stored locally.
WhatsApp has almost reached its user base of 20 million for payment services, said the source, who declined to be identified as the details are private.
Online transactions, lending and e-wallet services have been growing rapidly in India, led by a government push to make the country’s cash-loving merchants and consumers adopt digital payments.