WhatsApp offers cashback rewards to users for using its payments service

WhatsApp is offering cashback rewards to drive more users to use its payment service, days after it was allowed by the National Payment Corporation of India (NPCI) to add 60 million more users.  

“We are running a campaign offering cashback incentives in a phased manner to our users as a way to unlock the potential of payments on WhatsApp. Offering safe, secure, and easy-to-use digital payments is an important part of scaling India’s digital economy, and we’ll continue to drive awareness of payments on WhatsApp as part of our broader efforts to bring the next 500 million Indians onto the digital payments ecosystem,” a WhatsApp spokesperson said in an email statement to Mint.  

WhatsApp was allowed to offer payments back in 2020, but due to a 30% cap put by the NPCI at that time, access to its payment service was limited to only 40 million users. With the cashback rewards, WhatsApp is hoping to get more users to use its payment services.  

According to a Reuters report, WhatsApp is planning to offer cashback of up to ₹33 for peer-to-peer payments, while a similar incentive is being tested for merchant payments. The rewards will be given in three phases regardless of the transaction size. WhatsApp is also planning to test cashback for payments at highway tolls and utility bills. 

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India is the largest market for WhatsApp where it has over 487 million monthly active users as of February 2022, according to Statista data. However, when it comes to payments the user base is much smaller, due to its late entry into the market and the 30% cap by the NPCI.  

Currently, the UPI payments market in India is dominated by PhonePe and Google Pay. In March, Google Pay accounted for transactions worth ₹338,873 crore, while the total value of transactions on PhonePe was ₹471,401 crore. WhatsApp lagged behind them with transactions worth just ₹239 crore, as per NPCI data.  

The digital payments market in India has seen unprecedented growth, especially after covid-19 outbreak. In March, data shared by the Ministry of Electronics and IT (MeitY) shows that the volume of digital payments in India grew by 33% year-on-year (YoY) during FY 2021-22. A total of 7,422 crore digital payment transactions were recorded during this period, up from 5,554 crore transactions seen in the previous year.  

Rewarding users with cashback for payments is a very common practice among payment and shopping apps in India. WhatsApp has tried its hand cashbacks before as per media reports. In October 2021, the messaging company had reportedly announced a ₹51 cashback for payments made through its app.