Ever since its launch in April 2016, Unified Payment Interface (UPI) has been growing quickly and reached a milestone of Rs 1 trillion worth monthly transactions in December 2018. Sensing the opportunity in digital payments space, several global behemoths including Google, Amazon, WhatsApp and Xiaomi jumped to UPI bandwagon.
Following the footprints of above four global behemoths, Tencent-owned WeChat is also launching a UPI-enabled separate app for payments.
“Senior officials of Tencent comprising of Chinese as well as Indians met National Payment Corporation of India (NPCI) executives three weeks ago for obtaining a licence for full-fledged payments app,” said two sources inside NPCI on condition of anonymity.
Like Google Pay, it would operate only under UPI ecosystem. Sources emphasised that the app is likely to be named as it’s in China – WeChat Pay. “Tencent already had partnered with three banks – Axis Bank, HDFC and ICICI. It wants to have its own UPI handle (@wechat),” outlined sources.
The app would be launched by the end of May-June. “The company is registering an Indian entity for WeChat Pay,” outlined one of the internal sources at Tencent India.
In China, Tencent’s WeChat Pay is the second most popular payments app after Alipay. Last year it crossed more active users than Alipay’s 520 million in early 2018. While popularity of Ten Pay is largely driven by WeChat’s 1 billion plus DAUs, it’s not the case in India. Despite trying hard and spending hundreds of millions, Tencent failed to gain significant traction for WeChat.
Tencent’s plan to launch an UPI-powered payments app in India has come at a time when its game PUBG has been gaining quick popularity in the country. Since PUBG offers several in-app items for purchases, it could use WeChat Pay as by default payments option locally.
With the entry of Amazon and Xiaomi, the UPI ecosystem has become overcrowded and also turned hyper-competitive for incumbents like Paytm, PhonePe and Google Pay. Given that RIL-owned Jio and WeChat are also joining the UPI ecosystem, the battle for digital payments would be more fierce as well as expensive.
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