Facebook’s India patent application chalks out a system which would allow users to link any payment instrument — credit/debit card, bank account, etc. to their instant messaging account and make payments to other users by sending a message. “The systems and methods provide a transactional payment system integrated with a messaging system that allows two or more users (at least a sender and a recipient) to securely send and receive an electronic payment via the messaging system," the application reads.

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FacebookBrings India a Chat Enabled Payment
Service
In what could be a step towards offering its digital payment services in the country, online social
networking giant Facebook Inc has filed a patent application with the Indian Patent Office for its
invention on sending and receiving payments using a message system.
#DigitalErra Thought Corner
Presently, in some countries such as U.S, Facebook offers payment services through its online
chat application Messenger.
About the service
Facebook’s India patent application chalks out a system which would allow users to link any
payment instrument — credit/debit card, bank account, etc. to their instant messaging account
and make payments to other users by sending a message.
“The systems and methods provide a transactional payment system integrated with a messaging
system that allows two or more users (at least a sender and a recipient) to securely send and
receive an electronic payment via the messaging system," the application reads.
Facebook says its system will have several advantages over conventional payment applications.
“In theory, the concept of using a payment application on a mobile device to electronically
transfer money provides a convenient method of transferring money between users. Conventional

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payment applications, however, have several drawbacks that often cause frustration, confusion
and result in a payment process that is often more time consuming than it is worth," reads its
patent application.
However, in its patent application, Facebook makes no mention of WhatsApp or Facebook
Messenger, instead making references to a messaging system.The system need not purchase or
download a separate application, which may result in a larger and quicker adoption rate of
sending payments via a transactional payment system, which in turn creates a large network of
users available to send and receive payments using a single platform.
More on the development
It's unlikely any offering would be a major profit generator for WhatsApp, but it would help
achieve what Facebook had hoped for in seeking to provide free web access, which is to get
more people online regularly and push consumers to use its services.
Bharti and SoftBank-backed Hike Messenger, a competitor to WhatsApp, has also shown interest
in enabling digital payments through UPI. It isn’t clear how Hike or other instant messaging
platforms could be affected if Facebook’s patent application is granted. Among the market’s
recent entrants is Sequoia Capital and Kleiner Perkins-backed Truecaller.
Digital Wallet Space
Facebook owns two of India’s most popular messaging platforms, WhatsApp and Facebook
Messenger. The former has 200 million users; parent social network Facebook has 184 million
who use its service at least once a month, with half of them logging in every day. The company
does not give numbers for its FB Messenger in India.
In contrast, Paytm, the country’s largest digital payments wallet, with a big share of the market,
has 220 million registered users. Japanese investment giant SoftBank had earlier this month
invested $1.8 billion (Rs 11,600 crore) in Paytm, for a 20 per cent stake in the company.
Facebook’s entry into digital payments could spark an upheaval in the segment here, currently
dominated by digital wallet apps, Unified Payments Interface (UPI), and the BHIM app.

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In India, with low penetration of credit cards and prevalence of digital wallets, the US social
network is looking at a wallet integrated in its instant messaging apps.
Consumers in India made about 89 million transactions on mobile apps in April, transacting Rs
2,200 crore between them and businesses, according to the Reserve Bank of India data.
Conclusion
India is seeing unprecedented activity in digital payments, particularly since the government
banned high-value currency notes in November and took a series of steps to incentivize digital
payments in a country where cash remains king. More than a third of Indians now access the
internet and mobile-phone penetration stands at around 80 percent, with both figures rising
rapidly. Facebook’s entry into the space could give it a number advantage from the outset.
However, it is to be seen how the company manages to capture the online to offline payment
market, which Paytm has done so well.