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.
Also read: Meta’s Cred deal showcases new playbook: take stake, hire the founder
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.
Also read: Kunal Shah is WhatsApp CEO as Meta leads $900 million financing in Cred
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.
