WhatsApp is controlled by Facebook, and they already centralize a gigantic amount of personnal data. Their moral track record has also been consistently bad. They were part of the PRISM program. They meddle with politics. They are rich and powerful.
The chinese WeChat example shown us how convenient a popular chat app coupled with a payment system can be, and how quickly an entire society can adopt it.
I think this feature should be considered as a threat to users, and be avoided, while actively and strongly, but respectfully, advising people around us to do the same.
This is highly deceptive framing. PRISM was a passive cable tapping program. Companies weren't "participating" in it as much as they were victims of it.
Facebook was targeted by PRISM and rapidly worked to mitigate as soon as they knew about it, just like every other cloud service provider that was victimized by cable tapping under that program.
"Sources challenge reports alleging National Security Agency is 'tapping directly into the central servers.' Instead, they say, the spy agency is obtaining orders under process created by Congress."
My paypal account cannot receive money - send only because of my location. Consequently, I've been shut out of many legitimate opportunities. Got scammed multiple times as a freelancer both by the job providers and the platform.
Can't wait for this to available in my location. "Threat to users" be dammed.
Receiving money as a freelancer can be challenging, but given how dangerous it is to give FB more power, I think it's worth spending a bit of time in finding alternatives.
Last customer was in India, and it was hard for him to wire me money. Stripe made it a breeze, I created an invoice, enter his mail, and he just paid using his credit card.
The fees are a bit high, so the question is more "how much inconvenience do I think is worth this moral stand?".
And there is no universal answer to this question, since moral is arbitrary, and I don't accept the inconvenience in many other avenues.
Facebook is actively hostile to privacy and security, including by building black hat exploits for open-source software and not reporting it to the developers afterwards and quietly shelving E2EE for Messenger (rumor mill says because of LEA influence or pending water down / walk back).
I have no doubt there are innumerable FB employees who will defend privacy and security. Zuckerberg doesn't care, and will sell his users out the second it impacts the bottom line or offends the government FB is in bed with (go listen to the hot mic recording between Zuckerberg and Angela Merkel, for example).
I think this is a pretty smart play. I (and a lot of Brits, I'd guess) use WhatsApp about every 7 minutes. Sure I could send money through PayPal, or bank transfer or any of the other apps I have on my phone that facilitate it - but WhatsApp would make those payments to friends just that little bit more convenient. Why open PayPal? Why make my mate open PayPal? I'll just send it next time I check all my chat groups...
This is probably also a pretty smooth intro to Libra. Start with "we'll send X pounds via Libra instant transfer: £X = XL", end with "You have XL in your account. Withdraw to £".
In Canada, bank transfers are so seamless that I see no chance of this ever gaining traction. It's called Interac e-Transfer, and all domestic banks are part of it. All you need is access to online banking, so it's universally available. It's free, too (for personal accounts).
The way it works is the sender signs into their online banking and initiates an e-transfer. The sender doesn't need the recipient's banking details, only a phone number or email address. The recipient follows the link in the email/SMS message they received, signs into their online banking, and selects the account to deposit the funds into. The entire process is immediate.
If the recipient has registered that email address or phone number to auto-deposit into a specific account, all the sender has to do is type in the amount and hit Send. Otherwise, they will have to create a short question with a secret one-word answer that the recipient needs to answer correctly.
How could WhatsApp payments be better than that? Not everyone has WhatsApp, and if you want to use it you'll need to go through the hassle of linking your bank account.
The hassle of linking your bank account is more of a hassle in countries where that isn't necessarily easy to do. (For example to link an internet banking account to your traditional bank in Canada, you usually need to send a personal check in snail mail.)
In China, where mobile payments are ubiquitous, the process of linking your bank account is just typing in your name and account number, and entering the one time pass code your bank just sent over SMS. Now you can pay for everything - not just individuals on your contact list, but literally anyone who also has the app installed - just by scanning QR code and entering your PIN. The recipient doesn't need to sign in or confirm anything, it's just done.
Don't underestimate the convenience of this setup. I do like that Interac eTransfer doesn't force people to install a proprietary app to transfer money, but can you really see it replacing cash in a grocery store or helping people split the bill at a bar?
I've tried to split the bill this way too when I lived in Canada and didn't find it quick and easy at all.
First everyone needs to log in to internet banking, then they need to find out the email address of whoever is picking up the tab, then they need to wait for that person to receive their email notifications, then that person needs to log into their online banking to accept each transaction one by one... With Alipay or WeChat it is much more seamless, and the whole process can be completed in literally a few seconds.
It might not seem like much of a difference (a few minutes vs a few seconds), but once people get used to that convenience, I can't see them wanting to go back.
Curiously, their Android app database (msgstore.db) has had a "pay_transactions" table, and a "payment_transaction_id" column on the "messages" table, present for about a couple of years now.
I guess they've been planning/testing this for a while.
I see vertical integration increasingly as the only viable Big Tech strategy. Chat apps have existed since the early internet, but never one as popular as WhatsApp that can make payments. The outcome if this trend were to persist would be a small group of WeChat style omni apps.
Status is the decentralized alternative to Whatsapp [1] and cryptocurrency is the decentralized alternative to Facebook Pay.
However I think Status and cryptocurrency are nowhere near ready for mass-adoption. I don't use Status, because it hasn't implemented private payments yet. Unmasked payments on the blockchain can completely compromise your privacy.
WhatsApp in India introduced this 2 years back via UPI (Unified Payments Interface). Although UPI payments are popular in India via GooglePay, PayTM, etc, payments via WhatsApp is rare.
Payments via Whatsapp is rare because of a reason. That functionality is in beta and only available to a million users. They are stuck with getting regulatory approvals for 2 years.
Smart. But is it too late? Payment apps such as Venmo and others became very popular in recent years. Everyone already has one installed on their phone and connected to their bank account. Although at least Venmo is such a crappy and stupid app that maybe it's not too late.
This just shows again how slow big companies are. The idea of allowing payments within whatsapp has been talked about for at least 3 years now. They are only now starting to experiment with it.
You might be in a bubble. Article mentions India and Brazil, where people still prefer cash transactions and payment apps are not at all common. Introducing payment service in chat app people already use will blow away competition. I don't like it one bit, but WhatsApp is posed to make big impact on payment system.
My home country, African country, is in big trouble when it comes to the economy. It is possible to "send" money or goods home. You just head to advertised stores in your resident country and hand your money over. Your relatives at home can go collect money/goods from a store that's part of the network. No systems involved except WhatsApp.
The more technical folk would agree with you. I have heard many say this situation is ripe for bitcoin but in practice I have yet to encounter a person using bitcoin in my home country.
Network probably wasn't the most clear word to use. I meant any one of the physical stores in home country that work with the agent in the resident country. My observation is an agent from a specific area in home country will work with the stores from his area in his home country. He or she collects "real" money in the resident country and the shop owners provide the money/goods in home country. All this happens through regular WhatsApp. Not the new money feature.
Venmo is irrelevant in (all?) most of the markets where Whatsapp is utterly dominating. In February it was reported that the platform has 2 billion active users.
Right. But all these countries have a popular payment app similar to Venmo that all people use. For example, in Israel where whatsapp is as popular as in Brazil, there's an app called Bit everyone is using, where you can send money using phone numbers. I'm sure India and Brazil have similar apps.
I seriously doubt that, I've lived in 3 of the countries (fairly large ones) where WhatsApp is THE communications and in all of those, at least to my knowledge, most (mostly young) people send money electronically through banks, sometimes more modern digital versions like Nubank in Brazil, but there's no all-encompassing default solution.
There is no equivalent in Brazil yet, not with any significant market share.
The closest thing we have is Nubank, which is a mobile-only bank, but even that is not nearly as universal as WhatsApp.
Essentially everyone with a phone number uses WhatsApp, but payment apps so far have been restricted mostly to the 20s ~ early 30s audiences in terms of adoption.
I might be in a bit of a bubble here (Porto Alegre), but all my friends except for one who's a tinfoil-on-head privacy nut use PicPay. Even more hipster-y restaurants/bars are starting to accept payment over it.
Anecdotal evidence, I know, but lacking proper studies...
In São Paulo it seems PicPay is more popular with younger people, as you can open an account being 16 or older. Nubank you have to be at least 18, probably as it mainly is a credit card.
I don’t have an account, nor have seen somebody using it, though. I’m totally outside their target group.
In India there are multiple apps like GooglePay, Phonepe, Paytm. All these are popular and widely used, Whatsapp was trying to get into payments in India for a long time but unable to launch because of regulations.
UPI payments are very popular in India and GooglePay really did a good job in getting the market share here in India.
Unlike a lot of countries, the UK has free and near-instant bank transfers which seem to be a de facto standard for things like splitting bills with friends.
Incidentally I tried to use Venmo while in the US, but the app was geo-blocked so I couldn’t install it with a Google Play account set to the UK.
Interestingly, you might actually have that a bit backwards - North America is the only place I know of that doesn't have free (or with a fee of a few cents), near-instant bank transfers. It actually surprised me how backwards the banking system seemed the first time I was in the US (coming from West Africa).
Venmo only works in the United States as US resident and with a US bank account. Swish only works in Sweden if you have a Swedish bank account, Bluecode only works in Germany and Austria.
That fragmentation doesn't matter too much if you're a resident of one country and don't travel too much, but it becomes a real issue if you travel or for some other reason reside in another country. For example, Sweden is mostly cashless and people use Swish to pay each other or to pay for goods at smaller merchants. Without a Swish account (that requires a Swedish bank account) you're locked out and can't pay anyone or receive payments.
For Europa EMPSA (https://empsa.org/) will hopefully make that situation a little bit better, as it would enable mobile cross-border payments within the European Union. But that project is still in the early stages and a platform like WhatsApp that's able to provide frictionless, cheap, cross-border payments looks definitely like something that could be successful.
Where I think Facebook has an edge is also owning Instagram.
I don't know worldwide, but in for example Colombia, it is basically the primary and some cases only store front for a lot of products, small manufacturers and service providers.
Facebooks can control the entire sales cycle from discovery to close.
We don't have Venmo or anything similar in Mexico. I don't know if it's because of regulations or what, but nobody has developed anything similar. And Whatsapp is huge here.
What’s the switching cost? If all your friends are suddenly available on your most essential communication app, what’s the reason not to give a try. And boom you’re locked in
Switching cost is not high, I agree. The main thing is connecting whatsapp to your bank and credit card accounts. Some people might be hesitant. But there's another issue that is not so much related to switching cost. Whatsapp is a communication app. People mostly use it to communicate with friends and family. Not everyone wants that any stranger who they ever send or receive money from would now have their phone number and can now see when they are online and text/call them on their main communication app. (you can obv block users to prevent that but still). Although tbh I think this wouldn't be a big issue for the cultures where whatsapp is currently very popular as they are already using it to communicate with everyone.
I don’t think the sending money to businesses feature will require you to disclose your phone number. WeChat doesn’t, and that app is a privacy nightmare.
My impression is that in Germany (and lots of other European countries) people just directly send money via SEPA. Usually that's free and all you need is the IBAN number of the recipient. And with banks that participate in SEPA Instant a transfer doesn't take longer than a few seconds.
fyi, Venmo is owned by PayPal. I think the reason it became more popular with individuals in the US is that with Venmo it's easier than PayPal to send and receive money without paying a fee.
Is Facebook allowing developers to build apps on top of this payment system? API open to developers? Perhaps integrating Libra with some form of ROSCA(money pool) app and decrease the risk of cash on hand Not sure if I've seen anything that addresses this.
Looking from the UK, and using app like Revolut and Transferwise, my perception is that the US is relatively harder for a global firm, given payments appear to be regulated there at the state level (especially compared to Europe having SEPA). Running a payments processor is complicated and an international one much more so!!
Interestingly they seem to have piloted in India and are launching with Brazil, which makes some sense given the size of their domestic markets.
So this payment feature that Whatsapp is rolling out works internationally? Even when WeChat launched payment in HK market, they had to go with a separate wallet for HK transactions.
My point is that allowing payments within a single market is a pretty old feature and Whatsapp is late to the party.
#/media/File:PRISM_Collection_Details.jpg){kind=link}
The chinese WeChat example shown us how convenient a popular chat app coupled with a payment system can be, and how quickly an entire society can adopt it.
I think this feature should be considered as a threat to users, and be avoided, while actively and strongly, but respectfully, advising people around us to do the same.