WhatsApp the global messaging app owned by Facebook recently launched WhatsApp for Business in a few selected countries like India, Brazil, USA, and France. WhatsApp reportedly has started testing out its Unified Payment Interface based payments feature in India.
The new feature, available for select WhatsApp for Business Beta users on iOS and Android, enables users and Small Businesses to send and receive money using Unified Payments Interface (UPI) standard. Considering that WhatsApp for Business App is focusing on SMEs, the payments platform's integration may give another boost to digital payments around the world but in Africa or to move closer to home in Uganda, this might spell doom and gloom for mobile money payment platforms and Fintech Start-ups in Uganda and Africa as a whole.
Mobile money, which happens to be an East African invention that has gone on to revolutionize the way people in Africa do business and trade. It has a caused unimaginable disruption to the traditional banking systems in Africa. Financial institutions have realized that the only way they can survive, is to evolve or work together with Telecoms thus the introduction of Agency Banking. Mobile money has now become a force to reckon with. All one has to do is buy a SIM card from a vendor of their preference and register for mobile money services. It is totally a different proposition when opening up a Bank account.
Standard Chartered Bank has started closing some of its upcountry Branches like in Gulu and Mbarara in Favour of Agency Banking. Stanbic Bank introduced Flexi-Pay, Centenary Bank has Sente Mobile just to name a few. Mobile Money has brought banking services closer to the low-income earners and the rural area masses. It has greatly boosted trade and the way we do business in ways we cannot imagine. Fintechs all across Africa quickly realized the economic and disruptive importance of Mobile money.
Closer to home, Fintechs like M-cash, Peebu, PayWay, EzeeMoney, Mambo Pay, AkelloMoney, Pegasus Technologies and much more have introduced new ways of paying bills and services through mobile money something that was dominated by financial Institutions back then. One no longer has to go to the bank to pay their electricity bill, water bill or TV bills.
Payments made on the mobile platform are instant and efficient. When there is instant need buy Yaka Tokens or Pay for Cable TV, all one does is go to the mobile payment Menu and select what they want to pay for. Better yet, some educational institutions now accept mobile money payments when one is clearing school dues.
With WhatsApp pay currently being Beta tested, it is now a simple matter of when and not if. Very soon, WhatsApp pay will be in Africa. Uganda has close to 24 million mobile phone users and a sizeable number of these own smartphones and uses WhatsApp for both formal and informal communication and with the Launch of WhatsApp pay, there will be serious competition for Mobile money platforms.
The Unified Payment Interface acts as a payment link between the clients and the business's respective bank Account. WhatsApp and other social media messaging apps led to the demise of SMS services. WhatsApp pay is effectively going to eat into Mobile Money's market share one way or another.
However, Telecom companies know very well the effects of disruptive technologies. In Nigeria, during peak hours, Telecoms drop so many calls and people now use WhatsApp voice call capability. This lost revenue can never be recouped back after all WhatsApp calls are free and of high quality.
However, WhatsApp pay will not be the downfall of mobile money in my opinion. WhatsApp pay favours those with existing bank accounts like SMEs. Remember WhatsApp for Business is an innovation made to help small businesses communicate better with their clients and WhatsApp pay will quickly provide an alternative way to pay for the comfort of wherever you are.
Mobile money, on the other hand, is an innovation that does not only cater to small Businesses but it is a preferred "Bank" of choice for the rural masses. If one was to send money to their grandparents in the Village, the chance is that they would definitely use a mobile payment platform. I predict that Telecoms will most likely create an API that will integrate their mobile payment marvel of a solution to WhatsApp pay.
Mobile money has made many inroads in Africa and it will take an act of God for WhatsApp Pay to dislodge it. Facebook Groups is the reason why OLX is closing shop in Nigeria, Ghana, and Kenya but WhatsApp Pay might not be able to replicate its parent company’s success.