How Facebook-Jio deal can change the world of digital payments, understand here
The Reliance Jio-Facebook deal could mark the beginning of a new chapter in India’s digital payment journey, which will present new challenges for established entities like Paytm and PhonePe. Facebook is working on payment through its instant messaging application Whatsapp Pay, which is currently under testing phase. Now with their strength and the local knowledge of Reliance, both sides can bring the product as soon as possible.
A top banker said, ‘Through this deal, Facebook has bought that insurance policy. With the support of Reliance, it can better deal with the regulatory environment in the country and can come soon with Whatsapp Pay.
Facebook bought a 9.9% stake in Reliance Jio for $ 5.7 billion (Rs 43,574 crore), valuing the telecom company at Rs 4.6 lakh crore of pre-money valuation.
Facebook is doubling its interest in the Indian market and testing the pay product through WhatsApp. WhatsApp has 400 million users in India, the highest in the world. Prior to the Reliance deal, industry experts said that WhatsApp could challenge the three largest payment companies in India – Google Pay, Paytm and Phone Pe. Now with the help of Reliance Jio, the social media giant can bring valid use and grow rapidly. Banker said that the biggest challenge for WhatsApp was the compulsory data localization of the country, which was not being followed. He said, “This deal can also help Jio Payments Bank, which has not yet reached a large scale among consumers.” WhatsApp can bring millions of its users to the platform with a valid use case fast. ‘
The popularity of the messaging application is among every generation and the ease with which anyone can transact through it. According to the latest data from the National Payments Corporation of India, 1.2 billion transactions took place in March through the Unified Payments Interface (UPI). In which 2.06 lakh crore rupees have been made through the platform. If Whatsapp allows Pay and consumers complete their purchases through Jio platform, then it can be seen a surge in numbers.
WhatsApp will change the way business transactions
A top executive associated with digital pay said ‘As there was tremendous competition between QRcode and link-based payments between the three established brands (Google Pay, Paytm and PhonePe), WhatsApp will change the way business transactions are done.’
Google Pay provides good insight into consumer behavior. Payments made by the giant in the search engine world became an instant hit for two reasons, the first being attractive cashback and ease of use.
Many consumers have switched from PhonePe and Paytm to use Google Pay. If WhatsApp brings the facility of transaction through a messaging window, Google will have to work hard to retain customers.
On WhatsApp, it can challenge PhonePe in two ways.
Walmart-owned PhonePe is building a merchant payment experience to keep its customers together. According to the latest data shared by the company, it has around 200 million users and 10 million merchant networks across the country. It has also created a commerce experience in the app, which allows bus and hotel booking.
On WhatsApp, it can challenge PhoneP in two ways. First of all it will bring 400 million users in a big way. Second, it will also leverage JioMart for an end-to-end commerce experience for the consumer.
After all, Paytm, the country’s largest digital payment player, has a base of 15 million merchants spread across every corner of the country. It has diversified from its basic payment business to mutual funds, insurance and online shopping for customers.
The combined strength of Jio-Facebook will be the most valued startup in the country. In a recent interview, Paytm founder Vijay Shekhar Sharma said that he has the ability to run the company for the next four years even at the current liquidity rate. Industry experts say this will be a corporate battle.