Instant messaging application WhatsApp has reportedly initiated discussions with Indian banks and other institutions to allow its users to make payments via United Payments Interface (UPI).

As per the report from Economic Times, the company is in talks with the State Bank of India, the National Payments Corporation of India and a few other financial institutions to integrate the payments interface on its platform.

A senior SBI official, who is aware of the development, said,

Due to the complexity of the architecture, WhatsApp is in discussions with the State Bank of India, NPCI and few other banks to devise ways to integrate their systems with the bank and with NPCI.

He further added that they are currently at the ‘proof of concept’ stage, looking at ways to integrate with the back-end. Launched by erstwhile Reserve Bank of India Governor Raghuram Rajan in 2016, UPI is run by the NPCI.

WhatsApp is in early discussions with several Indian banks, which could work with the messaging app service to implement UPI on its platform.

A senior executive, who manages payments at a private sector bank, said,

A messenger works in a manner of identifying an address box where the messages travel to instantly. Similarly, UPI instantly settles funds between one account holder and the other. WhatsApp will identify the recipient and the UPI layer will allow funds to get settled between two parties.

However, WhatsApp isn’t the first to offer payments services on its messaging platform. Such features have been adopted by Truecaller, which has worked with ICICI Bank to implement UPI-based payments.

Recently, Hike Messenger too started UPI-based payments in collaboration with Yes Bank. It has done so through a wallet licence from the RBI. With the roll out of the said feature, it became the first messaging app to offer payments service.

While messaging applications can allow instant and easy transfer of funds, banks are concerned over security of data in the process involved.

UPI, which has been a major part of government’s push towards digital payments, has been gaining momentum after the demonetization move. It clocked 17.8 million transactions amounting to about ₹7,000 crore in 2016-17.

WhatsApp, which has more than 200 million users, has a huge potential for enterprise solutions as well for this new payments features.

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