India is currently one of the fastest adopters of digital payments in the world due to massive rise of affordable smartphones, widespread internet access and innovative fintech solutions. Digital transactions today have become an everyday habit for millions of citizens. Unified Payments Interface (UPI) is at the core of the transformation. It is a government-backed platform and has become the foundation of real-time payments in the country. WhatsApp Pay has simultaneously entered the picture lately with an aim to ride on the infrastructure of UPI to make payments as easy as sending a message. It is worth exploring the two platforms in 2025 as both are shaping the future of digital payments in India.
Power of UPI
UPI was launched by the National Payments Corporation of India (NPCI) in 2016 and allows users to link their bank accounts to various payment apps. It facilitates making instant transfers with just a phone number or UPI ID. It supports peer-to-peer (P2P) and peer-to-merchant (P2M) transactions. It also supports bill payments as well as services like IPO subscriptions and donations. Users can send and receive money across banks and apps without any additional charges. The interoperability sets UPI apart from other payment options.
The growth of UPI has been staggering. The platform processed more than 16.5 billion transactions worth ₹23.5 lakh crore in October 2024. RBI noted that the share of UPI in total digital payments surged to 83%, which is up from 34% in 2019. The popularity of UPI is driven by ease of use and also by new features like UPI Lite for small offline transactions and UPI Credit to enable users to pay using pre-approved credit lines.
WhatsApp Pay
WhatsApp is currently the most used messaging platform in India equipped with more than 500 million users-base. It has introduced its own payments feature called WhatsApp Pay and on the UPI network of course. It allows users to send and receive money directly within the app. The platform received full regulatory approval from NPCI in 2024 to expand its payments service to all users in India. It was a significant step after years of gradual rollout and testing.
The greatest strength of WhatsApp Pay is its simplicity. It has integrated payments into the chat interface. This means sending money is as natural as sending a photo or text. It offers a huge advantage to users who are not comfortable with switching between multiple apps. It simultaneously also supports multiple Indian languages and this has helped in adoption in rural and semi-urban regions.
But WhatsApp Pay has a long way to go to catch up other UPI apps like PhonePe, Google Pay and Paytm with respect to transaction volume and merchant integration. Its usage is largely limited to peer-to-peer transactions and merchant adoption is very limited. WhatsApp Pay need to expand its scope in order to include more features and better integration with retail and small businesses.
WhatsApp Pay vs. UPI
WhatsApp Pay has no independent payment infrastructure. It operates on UPI infrastructure, but offers different user experiences and also serve different purposes compared to UPI. UPI is an open protocol and powers a wide ecosystem of apps as well as services. WhatsApp Pay is a feature embedded inside a messaging platform.
UPI supports multiple types of transactions such as small everyday payments and business-to-business transactions. It is also integrated with a vast number of banks and simultaneously supports QR code payments at retail outlets. The platform is highly versatile and has high adoption among merchants. Integration with government services and support for recurring payments have made it indispensable in urban as well as rural economies.
WhatsApp Pay is more focused on making person-to-person transfers easy and intuitive. It lives inside a widely used app and hence it is extremely accessible. Someone chatting with a friend can quickly send money without switching apps.
Both the platforms are strong with respect to security. UPI employs two-factor authentication, real-time alerts and strict verification protocols to ensure safe transactions. WhatsApp Pay benefits from the end-to-end encryption of WhatsApp and also device-level security. But user trust in WhatsApp Pay is still in the growing phase and particularly among those who are unfamiliar with the idea of sending money through a chat app.
Digital Payments Future
The digital payments sector in India is expected to grow exponentially. PwC report projects that digital payment transactions are to grow threefold from 159 billion in FY24 to 481 billion by FY29. UPI is expected to account for about 90% of all retail digital transactions by 2026–27.
Both the government and the RBI have continued to support the ecosystem. They are encouraging banks to innovate and expanding more features such as credit on UPI. They are pushing for international UPI tie-ups to enable cross-border payments. India has so far made progress in UPI integration with Singapore, the UAE, France and a couple of more countries.
WhatsApp Pay has the potential to play a major role in the growth journey. It can onboard millions of users with its massive user base and brand familiarity. Its biggest opportunity lies in rural areas as WhatsApp is a primary mode of communication there. If it can expand its features like merchant payments, bill payments and cashback incentives, it can become a serious challenger to the leading UPI apps.
Who Will Lead in 2025
The future of digital payments is not a question of UPI versus WhatsApp Pay in the country. It is rather the way the two will work together. UPI can be considered as the highway in which WhatsApp Pay can ride as a vehicle. The two are not direct competitors, but the two offers different experiences on the same infrastructure. UPI will undoubtedly continue to dominate in scale, breadth and innovation.
WhatsApp Pay can grow significantly in user engagement by making digital payments less intimidating and more natural. It can drive inclusion among users who have not yet embraced digital finance fully.
UPI will remain the foundation of digital payments landscape in the country, but apps like WhatsApp Pay will determine how accessible as well as how user-friendly the services become for the average Indian. If WhatsApp manages to integrate more features and bring in small businesses, it can surely play an important role in building a cashless India.