Messaging service WhatsApp is taking early steps towards making money off its platform in India. On Thursday, tickets booking platform BookMyShow said it had started collaborating with WhatsApp. It sent its users confirmations on WhatsApp for tickets booked, one of which was posted by a user on Twitter. “We will use this chat to send your ticket confirmation,” BookMyShow’s WhatsApp message read. “To stop receiving messages from us, please reply with ‘Stop’.”
A top Bookmyshow source told FactorDaily the collaboration was beyond the pilot testing stage: “(We are) not piloting — we have integrated with WhatsApp for sending confirmation… and in more than (one) way… The conversations are on on various fronts.” More details were not immediately available but it appears the company may be looking at options involving payments and commerce through WhatsApp.
BookMyShow is not the only company that is looking at what is being referred to as “WhatsApp for Business”. WhatsApp is in talks with other companies such as Uber’s local rival Ola and hotel rooms aggregator OYO, and some airline companies.
Neeraj Arora, head of business at WhatsApp’s California headquarters, had told this reporter in November: “If you book an Uber or an Ola, and when the taxi is arriving, you can get the notification, call the driver through the app… (though) you will not be able to book the taxi from WhatsApp.”
A source said Ola may start sending one-time-passwords and invoices through WhatsApp. OYO, too, may start sending booking confirmations and invoices on WhatsApp, the source said asking not to be identified.
Requests sent to Ola and OYO executives for comment late Thursday did not immediately elicit answers on how WhatsApp for Business would be rolled out for them. “We are great fans of WhatsApp” was all that OYO executive responded.
The source also said that at least two private airline companies are in touch with WhatsApp to enable distribution of tickets and boarding passes. Airlines Indigo and SpiceJet did not respond to messages seeking comment.
This is the first time the world’s largest chat application has started monetising its platform. WhatsApp has steadfastly refused to introduce advertising as a revenue stream even though its base of monthly active users has topped 1.3 billion. Two years after social media giant Facebook acquired it for $19 billion in February 2014, it had started planning ways to monetise WhatsApp.
Those plans seem to be coming to fruition now with WhatsApp for Business. Just two days ago, TechCrunch and The Verge were among those to report that WhatsApp had started giving verified accounts to businesses denoting them with a verified green badge.
“WhatApp will also let you know when you start talking to a business via yellow messages inside a chat. There is no way to delete these messages from the chat,” the messaging platform’s FAQs page reads. “If you don’t have a business’s phone number saved in your address book, the name you will see is the name the business has chosen for themselves.”
Also coming: WhatsApp Payments
WhatsApp based payments are also coming to India. WhatsApp is in talks with companies, including some of those mentioned above, to enable payments on the platform. In July, the company had received approval from the National Payments Corporation of India (NPCI) to allow users to make in-app payments using the Unified Payments Interface (UPI).
It is not clear exactly how mobile payments will fold into WhatsApp for Business but appears to be clearly part of the company’s monetization funnel. A user will potentially be able to pay a cab driver, book movie ticket or hotel rooms, recharge phones, and settle utility bills using WhatsApp mobile payments — just like on a mobile wallet or payments app today. WhatsApp is one of the companies that is testing its tech on the next generation of UPI, FactorDaily had reported last week. It isn’t just WhatsApp, many large companies have made their play in India’s fast evolving digital payments space.
But WhatsApp is up against challenges that arise, ironically, from its own industrial-grade security layer that encrypts messages on its network not allowing anyone — not even itself — to see the contents of messages.
According to sources close to WhatsApp, the company wants to go the whole nine yards in digital payments — allowing peer-to-peer money transfer, pay merchants and even bills. It has over 200 million users in India, or 15% of its global installed base.
Rules for wallet and digital payments companies mandate storing information relating to transactions for as much as 10 years, depending on the exact nature of the business. “We will have to maintain the record for seven to 10 years, as per the government rules. We cannot keep it encrypted,” says Rohan Khara, head of product at MobiKwik, about his company’s operations.
When needed, details such as account balance, what amount is being transferred, and other transaction details can be pulled out from MobiKwik logs, Khara added. “MobiKwik encrypts and decrypts to manage the logs.” MobiKwik is India’s second largest mobile wallet company.
In other words, WhatsApp may be forced to change its encryption protocols to make true its ambition to become a mobile payments company. That will be a change in the way the company thinks about the platform.
“We can’t comment on exactly how will it play out, as we are still working on that,” Alan Kao, software engineer at WhatsApp, told FactorDaily recently, when asked how WhatsApp Payments would deal with rules relating to encryption in India.
But, he said, WhatsApp had made mid-course corrections in the past. “We had to reshape a lot of our thinking because of end-to-end encryption. Our philosophy of how we built products had to change,” Kao said about the past. For example, WhatsApp could initially see the contents of a video posted on its platform, a feature that was useful in instances such as the same video going around. That was changed early this year. “In encryption, we cannot see what the video is,” Kao said.
Other changes to WhatsApp’s business structure in India may also be in the offing, as mandated by rules of the Reserve Bank of India. “It will have to set up a customer care centre if it is handling payments — something that the company has never done,” said a senior executive at another wallet company, who didn’t want his or his company’s name taken.
This executive also said that for UPI to work the registered SIM card needs to be present on the same phone which has the UPI account for authentication reasons. “Right now, WhatsApp is SIM agnostic. You can use your WhatsApp account on any SIM… if you know the one-time-password that gets delivered on the registered mobile number,” he said.
Kao insisted WhatsApp will not compromise on customer privacy. “We take security and privacy very seriously… Almost anything we will be doing will focus in this particular area,” he said. “User privacy will always be important, whether its payments, sending video or messages.”
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Update (31 August 2017, 9.00 AM IST): Removed a link to a Tweet.
Visuals: Nikhil Raj
Disclosure: FactorDaily is owned by SourceCode Media, which counts Accel Partners, Blume Ventures and Vijay Shekhar Sharma among its investors. Accel Partners is an early investor in Flipkart. Vijay Shekhar Sharma is the founder of Paytm. None of FactorDaily’s investors have any influence on its reporting about India’s technology and startup ecosystem.