Why Abhijit Bose could be key to WhatsApp's ability to scale up payments biz in India

Bose has been evangelising the idea of how Ezetap could turn any mobile device into a PoS device.

For any company, the news that gets into the headlines is not really the one that helps it make money. Facebook Inc-owned messenger service WhatsApp seems to just be realising this. Having become overwhelmingly popular in India, the platform has to go beyond going viral in downloads or carrying the viral stuff: it all has to make business sense.

It is no wonder therefore that Mark Zuckerberg's multi-faced global social engine (Facebook, Instagram, WhatsApp) has plucked out Abhijit "Bobby" Bose from high-profile electronic payment startup Ezetap to run WhatsApp in India as country head and to build a whole new team. The task seems cut out: scaling up users is not the issue, scaling up transactions is.

WhatsApp-Reuters

WhatsApp needs to scale up its business operations in India. Image: Reuters

The real deal for WhatsApp is in dealing with life after complying with regulatory requirements such as data localisation – the business of storing vital data in India-based servers to comply with Reserve Bank requirements. It has to convert its consumer base into something profitable and not be just a lame carrier of Good Morning messages from India that only overload its servers, or proliferate fake news and rumours that get into the headlines for all the wrong reasons. 

WhatsApp payments is where the money is, but it is a complicated game that requires harvesting the 200+ million users that the messenger service has in India. At the Unified Payment Interface launched by the government has become an industry standard.

UPI and its related mobile transfer app BHIM are driving strategies linked to e-commerce and new-age banking. They are the common ground where rival banking apps meet branded mobile wallets. Picture it as a traffic intersection through which every virtual trucker carrying mobile money has to pass through. But it is more complicated than that because UPI can be used like a bypass road for any bank account holder to avoid mobile wallets through bank-to-bank transfers.

The trick for any payment player now is to make e-commerce and commissions happen through a combination of technologies, partnerships and services to boost commission revenues and profits. Peer-to-peer UPI transaction volumes have been growing steadily in recent months, but a key issue is the onboarding of merchants, and this is where somebody like Bose may bring in some solid leadership to WhatsApp.

Paytm-sadhu-India-mobile-wallet-Reuters-720

Paytm built itself up on the back of a cash crunch following the sudden demonetisation in India. Image: Reuters

WhatsApp launched its business app for small businesses this year and a separate one for larger businesses. On current reckoning, Facebook's dream may be to build a small business ecosystem in a web of partnerships built by Bose to ensure a community stickiness in a way that a simple state-run payment interface like BHIM cannot. Since Bose has been mandated to build in Gurgaon WhatsApp’s first full country team outside of California, there is a good chance that WhatsApp could well be "acqui-hiring" an Ezetap kind of a team that tailors technology to suit the workflows of businesses. Facebook has its own Workplace business now for collaborative workflows, and Bose's expertise would likely involve a vision that connects the enterprise side of the social network with the payments side. 

As head of Ezetap, Bose has been evangelising the idea of how his startup could turn any mobile device into a point-of-sale device.

For WhatsApp, this could mean a huge business-centric scaling opportunity in India's vast hinterland. Bose has also been talking of the power of partnerships in scaling up businesses by focusing on three Cs: Churn, Cost of acquisition and Contribution. For WhatsApp, all that means one magic word: Voila! 

With his engineering degree from Cornell and an MBA from Harvard and stints at Oracle, Bain & Co and Intuit, Bose's CV checks all the right boxes for WhatsApp: enterprise management, strategy, financial transactions and disruptive scaling. Bose had built a "mall-on-the-mobile" solution a decade ago at JiGrahak, when mobile payment was barely an idea in India. 

It is interesting to note that Ezetap's board includes Chamath Palihapitiya, a key growth vice-president-turned-rebel from Facebook's early years, and Ashish Gupta, one of the core engineers who founded Junglee, which got acquired by Amazon two decades ago. What happens now to the house Bose built at Ezetap? That would be a fascinating story to watch. We cannot rule out a deal or a potential conflict between Facebook Inc and Ezetap, which had as many as 200,000 merchants on board last year as it raised funds to take on Paytm.

Paytm, the mobile wallet leader that built its brand on the back of a cash crunch arising from demonetisation of high-value currency notes in 2016, has already been aggressively piggybacking on the government initiative to boost its UPI market-share to more than 30 percent in about 405 million transactions recorded last September. Flipkart-owned Phone Pe, Amazon Pay and Google Pay, formerly called Tez, have also been stepping up efforts to catch up with Paytm – even as the state-controlled BHIM app itself stays a laggard.

WhatsApp is a latecomer that now has to convert its user base into transactions that make monetary sense, building a brand, acquiring partnerships and possibly hitting Paytm by using its messenger power. WhatsApp launched its UPI-based payment without much fanfare in India last February with the potential promise that you can transfer money while you chat with your friend on a smartphone, but there have been regulatory issues that held up the fairy tale.

WhatsApp, sensing the opportunity in India, agreed to follow RBI norms for local data storage last month. The hiring of Bobby Bose is the logical next step because there is more to the business now than being a vehicle for forwarded jokes.

The writer is a senior journalist and commentator. He tweets as @madversity.

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