Facebook Inc's WhatsApp will start its payments service in India on Friday, the messaging app said in a blog post, after it received approval from the country's leading payments processor to roll out the much-delayed system.

WhatsApp, which counts India as its biggest market with more than 400 million users, had been running a peer-to-peer payments service with limited users for over two years, awaiting regulatory approvals.

A WhatsApp logo is seen behind a phone
A WhatsApp logo is seen behind a phone that is logged on to Facebook in the central Bosnian town of Zenica, February 20, 2014.REUTERS/Dado Ruvic/File Photo

WhatsApp will initially begin scaling up service with a max of 20 million users

"Payments is available now in 10 Indian regional language versions of WhatsApp," Facebook CEO Mark Zuckerberg said in video statement. WhatsApp said it had partnered with five Indian banks, including State Bank of India and Jio Payments Bank, for the service. WhatsApp will initially begin scaling up the service with a maximum of 20 million users, the National Payments Corporation of India (NPCI) said on Thursday.

All major payments players in India use the UPI framework, built by NPCI, for services such as peer-to-peer money transfer, utility payments and phone recharges. UPI processed over 2.07 billion transactions in October, up from over 1.8 billion the previous month, according to NPCI.

WhatsApp will compete with Alphabet Inc's Google, Walmart's PhonePe and Alibaba -backed Paytm in India's digital payments market, which is expected to more than double in size to $135 billion in 2023 from 2019 levels, according to PwC and Indian industry lobby group ASSOCHAM.

Facebook earlier this year bought a 9.99% stake in Reliance's digital unit for $5.7 billion, an investment that will give WhatsApp an inside track on payments for Reliance's retail unit, which aims to serve tens of millions of small shops across India.

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