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India and WhatsApp!

WhatsApp is India’s most used messaging app. It has remained as a top service in the market since 2010, though it became completely mainstream around 2014. Now for most people, texting is just about WhatApping someone.

When it came to the market, it was one of its own kind that allowed to send texts with ease and made users able to share media files with reduced size without compromising much with the quality. This was happening almost immediately at the tip of the fingers, and all of this was completely free. Having these phenomenal USPs led WhatsApp to stand out as an efficient tool, and soon it turned into a necessity for people. Due to its seamless design, people were able to adapt it quickly and soon it grew itself among a massive diverse user group of all demography, ethnicity and age.

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What is UPI (Unified Payments Interface)?

Not much later, the demonetization of the currency notes happened in India that gave rise to online payments and UPI modes. UPI is an instant real-time payment system developed by the National Payments Corporation of India facilitating inter-bank transactions. The interface is regulated by the Reserve Bank of India and works by instantly transferring funds between two bank accounts on a mobile platform.

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People were now able to send money, make payments and receive money through their phone only with an okayish internet connection. GooglePay, PayTM and PhonePe came out to be the most reliable platforms for UPI payments. This was a fairly new feature provided by trustworthy, yet fairly new products in the market. As a market opportunity, WhatsApp tried to scale in the online payment domain with its existing humongous user base.

Despite being the most used app in the nation and having a huge user base, WhatsApp payment failed in India. Let’s find out what led to this unusual consequence.

The Mental Model!

WhatsApp is the platform that helped democratize texting in many countries. It made texting so seamless that people were able to convey their thoughts through text with much ease. For some people, it even became easier to communicate through text rather than getting on calls. This became possible due to various communicating features that WhatsApp has, and not just text, such as emojis, stickers, GIFs and voice notes.

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Due to the seamlessness, people were able to talk to each other over WhatsApp, just how they do in person. This also includes gossiping, arguing, celebrating, mourning, sharing funny pictures, even sharing vulgarity, etc.

I discussed the same with a few of my friends that what could be a reason they think they still aren’t comfortable adapting to WhatsApp payments. This is what I concluded from all of them and my own understanding.

When a serious feature like payments was integrated into this product, people were not really comfortable using it being in the same place where they talk all kinds of things to all kinds of people. For us, ‘payments’ and ‘transactions’ have been serious terms. Whenever we think of ‘banks’ and ‘credit cards’, it always rings a small alarm in our head, as these are related to our hard-earned money. People found it more secure and reliable to a different app altogether for their payments (like PhonePe, GooglePay), which doesn’t have much of their personal details.

This is being one of the major reasons why WhatsApp, having a massive user base still couldn't make its user gain trust towards payments. A while back from now, Swiggy made a similar add-on called Genie to its existing product. A similar product called Dunzo already existed in the market but it was a new product and didn't have a strong user base. It established itself by creating a user base in cities like Bangalore and Mumbai. Whereas, the food delivery chain Swiggy, understood the need of the hour and took advantage of its pre-existing user base and delivery agents in most cities of the country.

This way, they stepped into something which they were doing already i.e. local deliveries. Made use of its existing user base within more or less the same domain. And also was able to push the feature on their product just enough to make almost everyone aware, which is something WhatsApp didn't dive much into.

Where is my cashback?!

Cashbacks, rewards, discounts, and coupons are a few out of many applications of gamification in a product. Gamification turns the interaction of a product into an unforgettable experience full of adventures, fun challenges, and the pleasure of the win.

GooglePay and PhonePe could just simply have pushed cashback into the user’s accounts or similarly could have rewarded them. But they provided this feature with elements of anticipation and fun and made users to be part of the process. After every payment, users get a scratch card which they can scratch by rubbing on their screen, out of which they get rewards and cashback.

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Whereas WhatsApp didn't come up with any such feature. There were no browny points for the user to start using the payments functionality in the app. The only reason now for people to start shifting to this product for all of their payments would be the comfort and trust, which we have already talked about.

WhatsApp payments who?

Advertisement plays a huge role in spreading awareness about anything. There are many ways to advertise something based on the budget and target audience.

When Instagram launched reels, it made modifications in its algorithm accordingly. It understood the user base that wasn't able to access Tik Tok anymore but still had a low attention span and how they're still craving for short videos for content. Instagram pushed reels in the feeds and stories more than posts. Soon after the launch, it also introduced a dedicated button for reels. And obviously, the advertisements on TV and YouTube have not remained unseen by any of us.

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WhatsApp on the other hand barely ran any ads that would spread awareness about the feature. There was no such push observed in the algorithm that would urge the user to try the new feature. Only the people who have exposed themselves to technology and tech news were able to find out about the update.

Unilateral medium

According to Financial Express, Arnav Gupta, an analyst at Forrester Research told them “WhatsApp is only a unilateral channel of communication for enterprises to speak to their customers. For instance, a travel portal can send a customer’s travel tickets and invoice on WhatsApp but he/she cannot talk back to the company while there are very few and limited use cases where there are chatbots set-up.” According to Gupta, that is the struggle WhatsApp is going through.

WhatsApp doesn't run any ads within the product itself. The major area of the app that generates income for the product is WhatsApp Business. Now, if most of these conversations between customers and business accounts are one way or through the bots, it is difficult for users to build enough trust to make some sort of financial payment over the chat.

The New Privacy Policy

WhatsApp offers three services to the users, namely:

1. WhatsApp (for personal chats)
2. WhatsApp Business (for small service providers and businesses)
3. WhatsApp API (for integrating the applications of larger organizations and also used by governments).

The change in WhatsApp’s Privacy Policy majorly impacts the WhatsApp Business application and not as much the other services. According to the new privacy policy, WhatsApp will share user-data with other Facebook companies only. The general users are under this misconception that WhatsApp will tap into our chats, communications, and media sharing through this metadata and make them public despite all communications continuing to remain end-to-end encrypted.

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When WhatsApp introduced the new policy, many users got a bit skeptical about their dependency on the product and started to reconsider other apps in the market, Signal being one of them. But considering how many countries had now been knit together as a community through the product, it was nearly impossible to generate the mass shift.

Even though users couldn't make a shift from WhatsApp as their most used messaging app, it raised an alarm among many of them for payments. This is one of the main reasons how some features get highlighted in the market just by user’s recommendations to other users without any ads, but WhatsApp Payments failed there as well.

Takeaway

WhatsApp is a powerful product and having payments as a feature in the product is making daily transactions faster among its user base. What I mentioned above were the outcomes I gathered from a number of resources I went through as a part of my secondary research on this topic. Now, WhatsApp might have its own reasons for not being able to incorporate the things but in the end, generally these are some major things that can either make or break the business.

It is also found that those who tried the app did not have a bad experience after all. Many positive reviews on the internet can be found about WhatsApp payments and how it made lives easier. The product seemed to be lacking mostly along the trigger and acquisition, and a little bit along the retention.