Facebook-owned WhatsApp is in talks with several digital payment companies in Indonesia to offer mobile transaction services through the messaging app in a bid to tap the nation’s fast-growing e-commerce sector, Reuters reports.
If this materializes, Indonesia will become the second country worldwide where WhatsApp is introducing digital payment services.
WhatsApp has also applied for regulatory approval in India, which has been delayed due to red tape involving local data storage rules.
There are over 100 million WhatsApp users in Indonesia, which is Southeast Asia’s largest economy.
Unlike India where it plans to launch direct peer-to-peer payments services, WhatsApp is expected to only serve as a payments platform in Indonesia, supporting payment services via local wallets, considering the strict regulations over electronic payments in the nation.
The move will also serve as a template for WhatsApp to launch the service in other emerging markets to get around regulations on foreign players creating their own digital wallets.
The messaging service is in advanced talks with several digital payments firms including Southeast Asian ride-hailing giant Go-Jek, Lippo Group’s digital payment startup OVO, and Ant Financial-backed mobile payments firm DANA.
The talks with the three firms are expected to be finalized shortly, Reuters said, citing sources familiar with the matter.
Indonesian state-owned Bank Mandiri, which operates a digital wallet, has also reportedly been approached by WhatsApp.
The launch of WhatsApp’s mobile payment services is not expected until 2020, as WhatsApp would not want to launch in Indonesia before India, according to the sources.
Facebook has been expanding towards the financial services field, with its planned cryptocurrency initiative, Libra, unveiled this June.
As Facebook intends to integrate its crypto wallet service, Calibra, into WhatsApp and all of its platforms, one key use case for Calibra would be remittances, targeting emerging markets.
However, the social network giant has “no plans to offer” Libra, or its digital wallet Calibra, in India, its largest market, citing the Reserve Bank of India’s restrictions on cryptocurrency.
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