New Delhi: Hike, a mobile chat platform, on Tuesday launched peer-to-peer (P2P) payments on UPI framework (universal payment interface) and a native wallet service. The new functionality is part of version 5.0 of Hike Messenger that includes a revamped user interface, return of the timeline feature and tweaks around camera and stickers.
With this announcement, Hike joins a plethora of apps (both banks-owned and third party) that support UPI-based payments and digital wallet businesses like Paytm, MobiKwik and PhonePe.
To be fair, Hike is the first chat app in India to do so, ahead of Facebook-owned WhatsApp that is reportedly in the process launching payments services starting with India. Truecaller, a spam caller identification app, launched P2P mobile payments in March.
“We are slowly transitioning from a chat messenger to a platform,” said Kavin Bharti Mittal, founder and chief executive of Hike app (Hike Pvt. Ltd).
The Delhi-based start-up has partnered with Yes Bank for back-end settlements infrastructure. “The systems, SDKs (software developer kits) and APIs that are needed for carrying out digital transactions are provided by Yes Bank. Hike controls the front-end which is UI (user interface) and owns the customers,” said Ritesh Pai, chief digital officer at Yes Bank.
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Hike, over the last year, introduced video calling, camera filters, new stickers and GIFs in a bid to increase user engagement. In payments, it is giving the capability to pay peer to peer or transfer directly to one’s bank account, and even recharge mobile networks through Hike Wallet.
In addition, users will be able to pay individuals in a chat group, and can use cover stickers—like virtual gift envelopes it calls Blue Packet—along with it. Blue Packets expire if not opened by the recipient in 24 hours.
The move is part of a larger strategy, like other digital payments businesses, to create an ecosystem of individuals and merchants, where merchants pay the platform for each transaction by a customer. Tencent’s WeChat, China’s largest social media app has pioneered the model and is widely used for P2P, e-commerce and merchant payments in China. Tencent is also an investor in Hike.
Mittal said the payments services will be rolled out to its entire user base of 100 million on Sunday. He declined to share monthly active users (MAU), a metric that determines popularity and user stickiness. He, however, said each active user spends about 24 minutes on the app each day.
Both WhatsApp and Facebook Messenger, the second most-popular chat service, have about 200 million MAU in India.
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“Customer acquisition is the bottleneck for most wallet companies; whereas users will adopt payments through chat since they have already downloaded the app and are comfortable with the platform. There by making for very low CAC (Customer Acquisition Costs) and good economics,” said Aman Kumar, chief business officer at KalaGato, a market intelligence firm focused on mobile technology space.
According to KalaGato, whose estimates are based on proprietary sample set of more than 650,000 smartphone users, Hike was installed on 17.4% of total smartphones that exist in India, in April. The figure is 94.1% for WhatsApp and 65.7% for Facebook Messenger, and 34.8% for Truecaller.