Facebook Inc’s messaging service WhatsApp is in talks with multiple Indonesian digital payment firms to offer their mobile transaction services, in a bid to tap the nation’s fast growing e-commerce sector, people familiar with the matter said, according to Reuters.
Indonesia could become the second country worldwide where WhatsApp introduces such services, as it awaits regulatory approval from India, its biggest market by users, that has been delayed due to local data storage rules.
But unlike in India where it plans to offer direct peer-to-peer payment services, WhatsApp will simply serve as a platform in Indonesia supporting payments via local digital wallets due to tough licensing regulations, the sources told Reuters.
The Indonesia model could become a template for Whatsapp to adopt in other emerging markets to get around regulations on foreign players creating their own digital wallets, the sources said.
Indonesia, home to 260 million people and Southeast Asia’s largest economy, is one of the top-five markets globally for Whatsapp, with over 100 million users.
The nation is set to see its e-commerce industry tripling to $100 billion by 2025, according to some estimates, but it also has some of the region’s strictest digital payments regulations.
„Though Libra has met with fierce resistance from central banks and supervisory authorities and might never see the light of day, in many other cases tech firms (both start-ups and established big players) have successfully captured bits and pieces of universal banks’ traditional value chain. This trend may only intensify in the coming years. In this environment, European banks remain squeezed.”