WhatsApp has introduced a payments feature allowing users to send money to businesses or fellow consumers within a message. The tool debuts in Brazil, which is WhatsApp’s second-biggest market after India. Brazil is also facing one of the world’s worst Covid-19 outbreaks. So the new service will come in handy for handling transactions in a socially distanced manner.
The service, which debuted today, is free to consumers. Businesses will pay a small processing fee.
On its blog, WhatsApp owner Facebook says there are 10 million small and micro-businesses “at the heartbeat of Brazil’s communities” that can benefit from the new payments capability.
While the new payments feature can help SMEs through the crisis, the implications extend well into the post-COVID future. And they extend well beyond Brazil.
Facebook has a stated mission of expanding “financial inclusion” around the world. In the blog post, Facebook suggests that a wider rollout of the solution is coming soon, but it doesn’t say where.
We recently wrote about Facebook’s undisclosed minority investment in Gojek, an Indonesia “super app” that combines ride-hailing, food delivery, eCommerce, payments, and more into a single tool. One reason cited for the investment was to bring “financial inclusion” (there’s that phrase again) to Indonesia via WhatsApp.
Here is the full Facebook quote from the Gojek release.
“This investment will support Facebook and Gojek’s shared goal of empowering businesses and driving financial inclusion across the archipelago. WhatsApp helps small businesses communicate with customers and make sales, and together with Gojek, we believe we can bring millions of people into Indonesia’s growing digital economy.”
Indonesia is both a top Facebook market (130 million users) and a top WhatsApp market (60 million users). We’ll go out on a limb and predict Indonesia will be among the next markets to add WhatsApp payments.
The other obvious choice is WhatsApp’s biggest market, India, which has more WhatsApp users than the entire U.S. population. India was also the test market for WhatsApp payments back in 2018.
The Big Picture
As we noted in our post about the Gojek investment, the push to help emerging markets with “financial inclusion” may be part of a larger strategy. We are increasingly seeing players from Uber to Facebook and others signaling a desire to compete on the “super app” plane.
Viewing the opportunity narrowly, this a path to monetization for WhatsApp. The encrypted messaging app has massive usage but has been under-monetized. Adding payments to this platform is really a no brainer. And much of the coverage of today’s rollout had a “what took you so long” vibe to it.
Is there a bigger play? Perhaps. The world’s most valuable real estate is arguably the home screen of a consumer’s smartphone. A single app on that deck that consumers rely on for rides, eats, messaging, peer-to-peer transactions, and so on, is incredibly powerful. Expanding payments into large markets in need of “financial inclusion” is one of several possible pathways to global super app status for Facebook.