WhatsApp's recently launched payment option is expected to disrupt the digital payments landscape in India, according to a research report by GlobalData.
The data and analytics firm said the Indian payments marketspace is already swarmed with over 60 non-banking players such as Paytm, MobiKwik, Amazon Pay and Flipkart (PhonePe).
Established players such as Paytm are also feeling the push and fear that their position will be challenged with the entry of WhatsApp payments, according to the report.
"E-payments in India are already witnessing unprecedented growth since the government's announcement of demonetisation in late 2016. Now with the foray of WhatsApp, the country's smaller and struggling e-payments companies fear a unique threat in an already crowded and competitive ecosystem," Prarthna Tiga, analyst at GlobalData said in a report dated March 8.
Paytm's Founder Vijay Shekhar Sharma echoed similar views last month, saying WhatsApp's parent Facebook is killing the open platform of the unified payments interface (UPI) system through "its custom close garden implementation".
WhatsApp pay currently allows users to transfer money largely among WhatsApp users and not to other UPI IDs.
GlobalData also noted that even though India's e-payments market is expected to grow in the coming years, most e-wallet operators are not profitable in India yet. In fact, some who have been issued licenses by the Reserve Bank of India are still evaluating the situation before setting up operations.
"We expect consolidations to be the force in the next few years, with the bigger players focusing on opportunities to expand their footprint in India and other markets. In the meantime, smaller e-payments players are tapping into unidentified opportunities to stay relevant in the market," said Tiga.