WhatsApp Pay: what it is and how it works

The money exchange system of WhatsApp could soon arrive in Italy too. The confirmation comes from Mark Zuckerberg. They remain, however, doubts about the system

The tests of WhatsApp Pay, the platform for the exchange of money between users (peer-to-peer) created by the Facebook group and launched in the Indian subcontinent in October 2019, after a first test phase "restricted" to one million users, continue in India. Soon WhatsApp Pay could also arrive in other countries.

According to what Mark Zuckerberg himself said during the presentation of the group's financial data in the last quarter of 2019, in fact, in the next six months the platform "will make great progress" and will be brought to other markets. Initially, however, in India there were problems related to the management of data: information about money exchanges, in fact, are extremely delicate to handle. In addition to WhatsApp Pay, the company is working on other methods to facilitate trade: from the Facebook Marketplace to Instagram Shopping, as well as the digital currency Libra.

How WhatsApp Pay works

At the base of WhatsApp Pay is a wallet, a virtual wallet that collects all the credit cards that the user will want to register within it. The user will be able to send money to another WhatsApp Pay user simply by drawing from the wallet, which in turn draws from a credit card. The operation, therefore, is similar to that of Apple Pay or Google Pay, but is made simpler and more immediate by the fact that both users share their data on the same platform.

The risks of WhatsApp Pay

WhatsApp Pay, technically, is a UPI: Universal Payment Interface, a payment interface in this case "peer-to-peer", that is, between peers. For this reason, the Reserve Bank of India and the Government of India have expressed concern about some of the features of this system, which risks being uncontrollable by the Authorities. Theoretically, the UPI of WhatsApp Pay has been developed in collaboration with the National Payments Corporation of India and all transactions are accessible to the Indian Central Bank, but in practice the number of transactions could be so high as to prevent a real control.

Turning dirty money by distributing it in thousands of micropayments, therefore, could become one more tool in the hands of crime. On the other hand, however, checking all payments one by one is a huge violation of privacy. Also for this reason, before WhatsApp Pay can arrive in Europe, Facebook will have to clearly demonstrate that it is able to better manage the data flow corresponding to the money flows.