Facebook’s WhatsApp is in talks to launch mobile payment services in Indonesia as the country’s e-commerce industry grows rapidly and Facebook wants to grab a piece of the cake, media reported on August 20.
As a result, Indonesia is expected to become the second country in which WhatsApp launches mobile payment services; India would have been ahead of the time, but because local data storage regulations have caused trouble for WhatsApp, WhatsApp will have to wait patiently for approval by Indian regulators before launching mobile payment services.
Unlike in India, where WhatsApp will only offer direct P2B payments, in Indonesia, where it plans to launch a platform offering payments via local digital wallets, the only way to meet regulatory requirements.
Many emerging markets prohibit foreign companies from creating their own digital wallets, and the Indonesian model could become a template, the sources said, and If successful, Whatsapp could extend the same model to highly regulated countries.
Reuters reported that it learned of the news on August 20 from an anonymous source.
WhatsApp is reportedly in talks with Indonesian ride-sharing provider Go-Jek, mobile payment provider DANA, fintech start-up OVO and Indonesian state-owned bank Mandiri Bank. Mandiri Bank is understood to have a digital wallet service.
The deal with the three companies is expected to be finalized soon, the sources said. WhatsApp also has contact with Bank Mandiri, an Indonesian state-owned company that has its own digital wallet, he added.
According to reports, Facebook is still waiting for approval from Indian regulators before launching a WhatsApp-based payment service.
Earlier this year, Facebook CEO mark Zuckerberg said he would bring WhatsApp payments to some countries. A Facebook spokesperson responded: “as Mark said earlier this year… We are working to bring digital payment services to more countries. WhatsApp is coordinating payment services with various financial partners in Indonesia, but the talks are at an early stage and there is little further information to share.”