Facebook (FB) appears to be ready to see a revenue spike from its WhatsApp platform. Facebook primarily monetizes its social apps through advertising. For example, its Instagram app has attracted millions of active advertisers.
Although WhatsApp hasn’t displayed ads like other Facebook apps, that is about to change as WhatsApp plans to start displaying ads next year. About $385 billion could be on the table in the global digital advertising market next year, according to eMarketer estimates. Advertising is Facebook’s bread and butter, contributing 99% of its total revenue in the second quarter.
Facebook’s WhatsApp payment service launching in India
In addition to selling ads, Facebook is also bringing a payment service to WhatsApp. We believe this could open another WhatsApp monetization avenue. Facebook plans to launch its WhatsApp payment service in India before the year wraps up, according to Abhijit Bose, the head of WhatsApp India.
With respect to the WhatsApp payment service, Bose told the Economic Times, “We hope to offer the service by the end of the year. Our goal is to enable end-to-end communication cycle between small businesses and customers. Payment is just one more step in how businesses interact with users.”
India’s small businesses already use WhatsApp to run their operations. Facebook believes the WhatsApp payment service could help Indian businesses increase their sales.
With the WhatsApp payment service, Facebook will burst into India’s booming digital payments market. As we noted in July, Credit Suisse predicts that India’s mobile payment market could expand fivefold in the space of five years to hit $1.0 trillion by 2023 from $200 billion in 2017.
Big tech companies pursuing India’s digital payment dollars
PayPal launched its domestic payment service in India in the fall of 2017, shortly after Google introduced a localized payment service for India called Tez. Earlier this year, Amazon launched a peer-to-peer payment service tied to its Amazon Pay platform in India.
Alibaba backs India’s mobile payment provider Paytm. Walmart controls Indian e-commerce provider Flipkart, which runs a mobile payment service called PhonePe.
India: WhatsApp’s largest market
India is already WhatsApp’s largest market. According to eMarketer figures, WhatsApp could finish 2019 with 340 million users in India. WhatsApp is poised to conclude the year with 99 million users in Brazil and 68.1 million users in the United States.