WhatsApp Could Add P2P Payments in December

For a while there, it looked like Venmo was going to have things all its own way in the peer-to-peer (P2P) payments market, and with good reason. After Venmo’s spectacular success on that front, though, a lot of businesses are taking P2P seriously. One of the newest entrants in that front is expected to arrive in December, as chat app WhatsApp adds P2P payment functionality to its own app.

The P2P functionality will be made available for users in India starting in December, the reports suggest, as it’s already been undergoing an extended beta program, which is set to run through the rest of this month. It’s set to be built directly into the chat app, which allows users to effectively send cash to whomever they’re talking to right in the app.

Given that WhatsApp has an enormous user base in India—over 200 million users a month at last report—and India itself is a ripe target for mobile payments alternatives thanks to the catastrophic demonetization of large parts of India’s currency, WhatsApp’s move is commonly regarded as a smart one.

That 200 million user base is a point likely not lost on one of the biggest mobile payments tools in the country, Paytm; it has a base that’s about a quarter of WhatsApp’s. While it counts 230 million users total to its credit, only about 54 million of them are active.

All WhatsApp needs to do is get around a third of its current active user base to be active P2P mobile payments users and it’s going to do a number on Paytm. Of course, Paytm already has a user base, and the chances that current users are going to jump ship is comparatively slim. Paytm will have a significant first-mover advantage here over WhatsApp. WhatsApp needs to offer something that Paytm doesn’t.

It may be, however, that the social element of WhatsApp will be enough to draw users. Since there’s probably some overlap anyway, it might well be that WhatsApp users that also use Paytm will stop using Paytm in favor of WhatsApp since it’s right there anyway. It could be a destabilizing element to the mobile payments market in India, and only time will tell just how destabilized things get.