You’ve probably already heard of Whatsapp Pay, Bummer that was not from us! If not, Facebook Inc., which owns WhatsApp, the most popular global social communication service in the world, announced a payment service called WhatsApp Pay that will work through its suite of mobile apps including WhatsApp mobile app.
For context and just how big this is, WhatsApp boasts of about 500 million Daily Active Users and over 2 Billion monthly users in about 180 countries, if this module works, which experts say will, sending money has never been easier.
So how does the service even threaten Safaricom’s M-Pesa? Recent statistics estimate “the usage of instant messaging platforms at 73 percent in 2019 and WhatsApp at the top with daily usage (compared to other apps) at above 87 percent across the 16 – 45 years age bracket.” Although M-Pesa is a cashless system, Kenya’s economy is still cash-heavy; with about 90pc of daily transactions still cash-based according to a 2019 report by the Financial Sector Deepening leaving a major gap that could be occupied by Whatsapp Pay.
Whatsapp will most likely dominate M-Pesa in international transactions and given the large number of users. In an age where the youth are almost always on the social apps and digital payments are heavily recommended due to Covid-19, WhatsApp Pay will easily resonate with the social-media-savvy young generation who are less concerned with brand loyalty.
However, we do not think Whatsapp Pay will kill M-Pesa, if anything the new system should push to make the local cashless payment even better. Adopting a cloud-based rather than a SIM card-based platform for instance. Coupled together the two should co-exist just fine.