Whatsapp banking is bad news

A few weeks ago, Access Bank, First Bank, UBA, and ABSA in South Africa came to the market to inform everyone they would be rolling out Whatsapp banking in a few weeks. The announcements came with so much fanfare I thought a new king of Africa was being announced.

Access Bank’s body dey catch. They launched their Whatsapp banking yesterday to consternation of the other banks who weren’t ready.

Did it resonate with me? Absolutely yes!

Whatsapp is so prevalent in Africa you could call it SMS of the not-so-poor people. A recent survey in South Africa showed that 100% of everyone who has a smartphone has Whatsapp installed even though the average person has just five apps installed. I assume, pretentiously, that the same metrics is valid for Nigeria. Correct me if I'm wrong.

Ask yourself (you have a smartphone if you are reading this, if you don’t then I owe you free lunch), when last did a friend send you an SMS?

Instead, SMS has been relegated to transaction messages from banks, updates from billers, telcos, and a few ATM spammers. If you got a personal message as an SMS, it’s probably from some of those losers who call themselves Apple fanbois; they don’t know that Whatsapp eats iMessage for dinner every day.

Whatsapp banking makes solid sense in different ways.

One, it's not spamming. I don’t get a message from my bank unless I register for it in the first instance. Nigerian banks can spam for West Africa!

Two, it’s an interactive two-way street, or that’s the way Facebook envisions it as I am not so sure that Nigerian banks are ready to listen to the diatribes of we angry customers as we spew every day like a volcanic lava.

Three, it cannot be spoofed. Or let me put it this way, it cannot be hijacked easily. Even if your SIM is cloned, as long as you have internet, you continue to receive messages on your phone, and if you are smart enough to protect it with a PIN, even if your SIM gets hijacked by Evans the Kidnapper, your PIN would be required to get your messages to your phone.

Four, SMS is notoriously unsafe. It’s in the plain on Telco servers such that even the blindest of them all is reading your SMS messages and cramming your USSD banking PIN now.

So Whatsapp is absolutely fantastic. 

Maybe not so fast.

If Whatsapp messaging catches on with the bankers, who will be sending Whatsapp messages for free, then the bulk SMS providers like Infobip, IP Integrated and Clickatell are in serious trouble. Rumor has it that they collectively send about 500 million messages a month between them. But then Clickatell may not cry like others. They are the API back-ends for the banks that have signified their intention to get to the market.

Of course, the telcos are in trouble as well but they have an upside: increasing data usage. MTN’s data use grew about 68% since last year, and they recently ponied up N200B for data expansion some few weeks ago.

Smart lenders like Paylater, Kwikcash, and QuickCheck, who read your text messages (oh my, those salacious messages!!) to have an insight into your willingness to payback, will have an incredible nasty time scaling to Whatsapp as SMS boxes will dry up. But I guess, they can take care of themselves.

While bank customers clap, and the lenders and VAS providers bawl, armchair pundits, like me, can only speculate about the next bank on the Whatsapp banking rat race.