Meta Explores Monetizing WhatsApp in India via Stake in Fintech Startup Cred

Meta, owner of WhatsApp, is exploring ways to monetize its massive Indian user base. A potential minority stake in fintech startup Cred, led by Kunal Shah, could offer valuable expertise in driving higher-value transactions and improving relations with the Indian government. While this move could boost WhatsApp's market share in India, replicating its success globally faces challenges due to UPI's unique, free model and regulatory concerns about foreign competition.

As the world's most populous country, it's no surprise that India is WhatsApp's biggest market. But the messaging app is yet to come up with a way of converting its eye-watering subscriber base into paying customers.

Enter Cred, a fintech startup founded in 2018 that runs a brisk business of helping members pay their credit card bills on time. Meta, which owns WhatsApp, runs on advertising revenue and could benefit from external expertise on how to monetise its messaging service.

So, it makes sense for Meta to pick up a minority stake in Cred. It makes even more sense to let Cred founder Kunal Shah run WhatsApp. Alphabet and Walmart dominate India's UPI payments, and Shah's ability to corner higher-value transactions could help WhatsApp swing more market share in its favour. Shah's appointment may also smooth WhatsApp's relations with GoI over content moderation.

Success in India, however, does not automatically translate into a global reset for WhatsApp. Cred targets members with high credit scores, which can act as a constraint to attaining scale. UPI operates as a unique online payments model that owes its popularity to being free of transaction charges.

This piece of public digital infrastructure cannot be exported without factoring in fees. Indian regulators fret over US firms hurting competition in online payments, and Meta would merely be reducing market concentration without addressing the concern of overseas control.

Globally, WhatsApp's monetary strategy relies on charging enterprises for customer services. It makes money off conversations initiated by customers and businesses. It offers online payments in markets where these services are available.

But its record in India suggests this has not been a priority till now. WhatsApp also allows its business customers to use AI bots for communication and marketing. Mark Zuckerberg has a vision of WhatsApp being the foundation for the private social network of the future, and is taking a guarded bet on finding the optimal monetisation strategy.