WhatsApp Payment has arrived in Africa. That has been expected since there is no clear path to monetize WhatsApp without subscription which Facebook has no interest in pursuing. Advertisement may not necessarily work for WhatsApp if Facebook hopes to keep the customers happy. So, here we go: WhatsApp payment is here in Africa.
As of Wednesday (August 1) South Africa’s Absa Group officially rolled out WhatsApp banking as part of its continuing effort to develop a digitally-led bank in Africa. Absa has signed on 10,000 customers since early July, according to Reuters.
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“As technology advances and more customers become connected, bringing banking to where our customers are is important to us, especially as we continue our journey to become a digitally-led business driven by innovation,” chief executive of Absa retail and business banking Arrie Rautenbach said in a statement.
The addition of WhatsApp banking is part and parcel to a growth plan for Absa that observers have called “ambitious.” The goal — once it has completed its separation from Barclays — is to capture (and in some cases recapture) market share in South Africa and double sales across the African continent from 6 percent to 12 percent. WhatsApp allows Absa to offer banking services that are available anywhere, anytime, to customers that want to use it.
Absa’s WhatsApp service, ChatBanking, will mostly be simple banking transactions. Users will be able to check their account balances and make payments to existing beneficiaries using brief and natural sounding conversational commands.
The Massive Dislocation
This will be a huge challenge to African fintechs. Payment is going to see massive dislocation because it is always harder to pull people from the ecosystem where they are to another. In others words, why would I launch a fintech app when I can make that payment via WhatsApp which I am already using with that client? The launch of WhatsApp payment in Africa is a big deal for the local banking and payment ecosystems.
I noted few days ago that WhatsApp’s move into payment would cause massive dislocation in African banking. In this age of chat and social media, transactions have evolved into content, commerce and financial services. To examine the impact in Africa, let us consider what these solutions have done in India where they are already or being deployed. India has about 250 million WhatsApp users, the world’s largest (China is a WeChat nation).
All Together
As I wrote few months ago in Harvard Business Review, companies like Facebook, the ICT utilities, can bulldoze themselves into new sectors. Adding payment in WhatsApp is industry-shaping. Largely, we have entered a new dawn where transactions have evolved into content, commerce and financial services – the so called social commerce which WeChat had perfected.
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Going forward, I expect new basis of competition with disruptive consequences in the African payment markets. Simply, the game has changed and everyone has to evolve: WhatsApp payment is possible the single African currency; Google Tez is on the way. The good news is that African consumers will experience lesser payment frictions, and that could be a good thing across many communities.
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