Product Fail: WhatsApp Payments
WhatsApp is the most popular messaging app in India. It has remained a market leader since 2010, yet it only became widespread in 2014. For most individuals, texting now means WhatApping someone.
When it first hit the market, it was one of a kind, allowing users to easily send SMS and share media files with decreased size without sacrificing much in terms of quality. This was all happening instantly at the tips of the fingers, and it was all entirely free. With these incredible USPs, WhatsApp became an effective tool and quickly became a necessity for individuals. People could adapt to it soon due to its seamless design, and it swiftly grew among a vast, diverse user population of all demography, race, and age.
What is UPI (Unified Payments Interface)?
Not long after, India demonetized its currency notes, giving rise to internet payments and UPI alternatives. The National Payments Corporation of India developed UPI, an immediate real-time payment system that facilitates inter-bank transactions. The Reserve Bank of India regulates the interface, which instantaneously moves funds between two bank accounts on a mobile platform.
People could now send money, make payments, and receive money using only their phone and an internet connection. GooglePay, PayTM, and PhonePe emerged as the most reliable systems for UPI payments. This was a relatively new function offered by reliable yet relatively new products on the market. WhatsApp attempted to scale in the online payment space with its massive user base as a market potential.
Despite being the most popular app in the country and having a large user base, WhatsApp payment in India failed. Let's look into what caused this unique outcome.
The Mental Model!
WhatsApp has helped to democratize messaging in numerous countries. It made texting so effortless that people could easily text their thoughts. Texting has become even more convenient for some individuals than making phone calls. WhatsApp's non-text-only communication tools, such as emoticons, stickers, GIFs, and voice notes, made this feasible.
Due to seamlessness, individuals could communicate over WhatsApp just as they do in person. This involves talking, arguing, rejoicing, lamenting, sharing hilarious photographs, and even posting profanity, among other behaviours.
We posed the question to a couple of my acquaintances and inquired as to why they don't feel comfortable switching to WhatsApp payments. This is the conclusion we drew from all of them and my knowledge.
When WhatsApp introduced a severe feature such as payments into this platform, users felt uncomfortable utilizing it in a different location where they converse about various topics with various people. We have taken 'payments' and 'transactions' seriously. When we think of 'banks' and 'credit cards,' a slight alarm sounds, as these terms are associated with our hard-earned money. People found it more secure and dependable to use a different app for their payments (such as PhonePe or GooglePay) that does not contain much personal information.
This is one of the primary reasons why WhatsApp, with a large user base, has yet to convince its users to trust payments. In the past, Swiggy added a similar feature named Genie to its current product. On the market, a similar product called Dunzo existed, but it was new and lacked a substantial user base. It established itself by cultivating a user base in metropolitan areas like Bangalore and Mumbai. Swiggy, on the other hand, saw the need of the hour and capitalized on its existing user base and delivery agents in most of the country's cities.
Thus, they expanded something they were already doing, namely local delivery. They have utilized their current user base inside roughly the same domain. And also able to push the functionality of their product just enough to make nearly everyone aware that something that could have been done better did not happen.
Where is my cashback?
Examples of how payment platforms can use gamification in a product are cashbacks, awards, discounts, and coupons. By adding elements of adventure, fun, and the satisfaction of victory, gamification transforms the use of a product into something that cannot be forgotten.
Both Google Pay and PhonePe had the option of automatically crediting users with cash back or rewarding them for their use. However, they infused this function with excitement and a sense of participation on the user's side. Users receive a virtual scratch card after each transaction, which they may "scratch" by rubbing the card across their screen to reveal instant incentives and rebates.
Whereas WhatsApp did not develop a function like that. The app's payment features didn't come with any in-app rewards. As we've established, convenience and trust are the only remaining arguments for the widespread use of this product for all monetary transactions.
WhatsApp payments who?
Advertising is a big part of getting the word out about anything. There are many ways to advertise something, depending on how much money you have and whom you want to reach.
When Instagram added reels, it changed its algorithm to work with them. It knew that users who couldn't use Tik Tok had a short attention span and still wanted short videos for entertainment. More than posts, Instagram pushed reels in the feeds and stories. Soon after it came out, it added a button just for spins. And none of us has missed the commercials on TV and YouTube.
On the other hand, WhatsApp didn't run many ads that would let people know about the feature. No such push was seen in the algorithm that would encourage the user to try out the new feature. People who paid attention to technology and tech news were the only ones who knew about the change.
The New Privacy Policy
WhatsApp offers three services to the users, namely:
WhatsApp (for personal chats)
WhatsApp Business (for small service providers and businesses)
WhatsApp API (for integrating the applications of larger organizations and also used by governments).
The modification in WhatsApp's Privacy Policy primarily affects WhatsApp Business. According to the new policy, WhatsApp will only share user data with other Facebook firms. Users believe WhatsApp will access their chats, communications, and media sharing through metadata and make them public, despite all communications remaining end-to-end encrypted.
When WhatsApp released its new policy, many users questioned their reliance on the app and began to examine Signal. Given how many countries were tied together by the commodity, a mass transition was practically impossible.
Even though users couldn't switch from WhatsApp, it triggered alarms for payments. This is one of the key reasons some services get promoted in the market without adverts. However, WhatsApp Payments failed there, also.
Takeaway
WhatsApp is a powerful product and integrating payments into the platform facilitates daily transactions among its user communities. As part of our secondary research on this topic, we examined various secondary sources and drew the above conclusions. Now, WhatsApp may have its reasons for not being able to implement these features, but in the end, these are typically the primary factors that can make or break a business.
It was also discovered that people who used the application did not have a negative experience. There are many good online evaluations of WhatsApp payments and how they have simplified life. The product appeared deficient in terms of trigger and acquisition and, to a lesser extent, retention.