Can Competing Brands Collaborate ?

Several Founders, Co-Founders, CXO Bankers, CXO Fintech professional & people who participated in the ePanel discussions:

Mr. Ajay B Panicker, CEO & Founder, NetPay Limited
Mr. Kamonasish Aayush Mazumdar, Founder & CEO at Foodieverse
Mr. Arun Tanksali, Co-founder & CTO, Nearex
Mr. Neeraj Chandra, Head of Operations and Technology, Abu Dhabi Commercial Bank
Mr. Raghu Veer Dendukuri, Founder, Ideal Nation, and Solution Architect at Invincible Tech Systems Inc.
Mr. Probir Roy, Co-founder, Paymate
Mr. Subbiaa Olimuthu, former Product Manager – Rupay
Ms. Ritu Rodrigues, Senior Manager-Digital Payments and Risk Management, Infiniti Retail Limited, Chroma
Mr. Hemal Shah, Technical Product Manager, Mastercard
Mr. Vikas R Panditrao, Co-Founder, Forum of Industry and Academic Knowledge Sharing (FIAKS)
Many other CEO/CXO Bankers & Fintech professionals on FIAKS Forum requested to remain anonymous

According to a press release, “Visa is working with Facebook so that consumers can fully use the new payments feature on WhatsApp in Brazil”. VISA announced its partnership to launch payments on WhatsApp. Well, well aren’t these competing brands in the payments space? WhatsApp can easily enable P2P and P2M payments without Visa or Mastercard through bank partnerships. Isn’t this partnership like Bank of America selling Wells Fargo saving accounts in its branches?

Well, yes they are competitors but when you want to be the fastest in the market to launch this is the best option.
Even in India, they have a dependency on bank and NPCI, the same is in all places, bank will be involved, if a bank is involved then somehow the scheme is also involved.
Also, but natural the product which is the fastest to enter the market and has a very clean user experience wins. People are used to WhatsApp and they will add referrals too which will help in faster adaptability.
A member cited an example, “Bigbasket sells several brands of products on their store, for example, Aashirvaad atta. So, when they started selling Aashirvaad atta in Bigbasket royal brand, does Bigbasket become a competitor to Aashirvaad? And they should stop working with Aashirvaad?”
Another question raised up was, how are Facebook and Visa competing brands. Isn’t Visa/Mastercard the primary mode of payment for any service Facebook provides? Here’s a profound answer to this, Well, it’s a normal business. There is probably a whole generation of Visa executives who have been taught how Kodak’s competition was not Canon/Nikon but Nokia or that of the airlines was Cisco/Video conferencing. And hence Visa looks at WhatsApp and says “I don’t want to be Kodak” and sidles up for a collaboration!
All in all, don’t banks collaborate with each other? Don’t banks collaborate with Fintechs and Payment companies? The market is big enough for all to thrive!

Now here are some questions raised on Brazil’s suspension of WhatsApp’s new payments system;

Question 1: What happens to the WhatsApp-Jio plan in India? Kindly note this time Indian regulators will be facing not WhatsApp executives but Reliance officials as well.

Question 2: Will regulators start to rethink on regulating companies like Google Pay who are not a payment system operator as per them?

First of all, as a forward-looking regulator, it’s time they stopped wanting to regulate everything. They already regulate the bank and the networks and have licensed them to operate. The banks and networks on the other hand have used their prudence, risk, and due diligence to satisfy themselves. They are using WhatsApp (third party) as a UI/UX for connecting with their customers. Like a new skin or a wrapper- a smoother/frictionless user interface with the same functionality as the legacy one.
The issue then actually is that regulator also wants to be a player too in this fintech story. With their own product-platform and have a say in market share and the “world of innovation”. If at all there is or could be an issue, it is of market dominance or unfair competition. Then in which case, it’s a case for their monopolies and restrictive practices agency to look at. Not their central bank.
The regulator should take the third party apps into its ambit and should regulate these companies like a separate category with specific guidelines and rules or as old thinking that, can we have a separate regulator for such third party apps to ensure there is a fair game for all.
Instead, what would be better is that the regulator should really think of tightening the process, in terms of security of transactions & privacy-related compliance measures with respect to KYC data, whether it is through existing sponsor bank relationships or even in other situations like these companies given direct license like banks on UPI ecosystem.
A member opines, “Banks having exclusive access to UPI and is authorized to facilitate access to Payment Service Providers (PSP) to service merchants and customers like an extended arm, Google pay, Whatsapp and any small company that is ready to serve in this sector has to be provided REST API Access to launch their UPI Business, as India needs many such companies to participate and serve, the Indian Digital Payment Industry having a huge potential to be established as a separate industry, above and beyond Banking & Fintech industry by 2023.”

Question 3: Are we heading for a digital pandemic and probable digital isolation for blunders that may happen in the payments space by allowing non-regulated entities through sponsor bank relationships. Especially when sponsoring banks has little control over the system used by these non-banking entities that direct them to debit and credit customer accounts?