Viber, the messaging app owned by Japanese ecommerce giant Rakuten has been a long-time player in fintech. It launched services such as money transfer and chatbot payment in different countries over the years. It is now launching Payments on Viber, a new service that allows users to set up digital wallets tied to their Viber accounts.
Payment wallets can be linked to other bank accounts and Visa or Mastercard. They can then be used to pay bills, purchase goods, and transfer money between people. These services will be available for free, and services such as payments to businesses will likely have fees attached.
This service will be launched in Germany and Greece first, with plans to expand to other European countries and Viber's global footprint to 180 countries by the end of this year.
Ofir Eyal, the Viber CEO, said that the reasons Viber started with these countries were strategic.
He described Greece as a "purple nation," where Viber is installed by approximately 91% of smartphone users. This translates to roughly 7 million Viber users in a country of 10.7million. It also makes P2P transfers easier (although money can be transferred to non-Viber users, it is less seamless).
Germany has 3 million Viber users. However, Eyal described Viber as a "strong corridor" that allows for transfer to Greece. Viber recently won a security award in Germany, and Eyal said that Viber's brand perception was strong.
Eyal stated that Viber's existing payment services, such as chatbot payments, will remain where they are, mainly in Ukraine and Bulgaria. These have enabled "millions" in transfers to date. However, Payments will eventually replace them.
Viber employs a large number of engineers to develop its app. It supports voice, video, and text messaging and third-party integrations. This fintech turn is happening in partnership with an external partner, which is quite interesting.
Rapyd, the "fintech-as-a-service" startup that provides a wide variety of embedded financial services by way of APIs to a host of other companies, is powering Payments in the two initial launch countries. Eyal mentioned that Viber could also be a partner in Rapyd's other markets or might choose to work with other partners.
Eyal also stated that Rakuten has no plans to invest in Rapyd. As Payments and Viber's fintech ambitions expand, he said that Viber could also include services from Rakuten or companies in which Rakuten invests.
Rapyd will not take over the entire operation of Viber; Viber will provide the tech and data necessary to complete the "KYC" aspects of the service.
Viber launches Payments at an exciting moment.
Eyal said Viber has 250 million monthly active users. This is significantly lower than other messaging-first apps such as WhatsApp and WeChat, which have billions of active users.
This number hasn't changed much over time, even though other apps like WhatsApp and WeChat have become more popular. It is not easy for Viber to reveal exact monthly active users figures. However, Viber reported that it had 823 million active users in 2016.
One source cited Viber's PR firm stating that this number was inaccurate. TechCrunch also learned that Viber had 266 million monthly active customers in the same year. It is well above 1 billion installed across iOS and Android, which has increased.
The idea behind Payments is, therefore, two-fold. It's meant to be a service for Viber's current users to increase engagement, make the app stickier, and potentially attract new users to the platform.
It is not uncommon for messaging apps to offer payments, and WeChat and other similar companies have made substantial profits from their platform. Meta, the parent company of WhatsApp and Facebook Messenger, has long sought to create a similar "super app" profile. However, its approach has been slow.
Eyal stated that Viber was slow to move faster on payments because they didn't believe mobile payments would be a significant trend five years ago. Viber saw firsthand the benefits of Viber's money transfer service, including the ability to transfer money.
Viber's approach to Payments development is open-ended, he said. We will see what takes off and where it goes. "We might invest in growth, building channels, and communities around E-commerce. We may also experiment with letting businesses display catalogs or individual items.
It's reasonable to wonder if it's too little or too late. Apple, Google, and many other fintech companies have made significant inroads in mobile wallets. It will be interesting to see if there is a demand and a critical mass of consumers looking for similar solutions within the messaging environment.
Viber cites McKinsey figures that show that global payments will reach $2.5 trillion by 2025. This is a massive opportunity that both established and new entrants will want to take advantage of.
Today's Viber news highlights an exciting shift in the app's direction under the leadership of its new CEO. He took over the role on an interim basis less than a year ago and was appointed permanently in March 2002.
Since its inception, the company has worked hard to create "fun" features with stickers and GIFs. It also promises to deliver on its promise of social shopping (an area its ecommerce-focused owner wants to expand over time). Eyal's future direction for the app is to shift to digital wallets and payments.
He said that the adventure was filled with Snapchat content and more fun thanks to Snap's partnership with them for AR filters. "But we won't be the Snapchat of this region. My value was always saving money on international calls, and I knew that we wanted to continue that tradition.
Viber's global user base and the current events make it all the poignant to offer value and services that no one else offers. After Russia's unprovoked invasion of Ukraine, the two largest markets for Viber are Russia and Ukraine.
It's not currently making any money in Russia, but Viber, encrypted from end to end, has kept it live in areas where Russian authorities haven't blocked it.
A lot of communication occurs between Ukrainians and Russians, and there are still many links between them, despite all the rhetoric and actions of the Russian government.
It is still operating its service in Ukraine, except for the areas where Russia has taken control. Eyal said it is currently unable to launch payments in either country due to extreme currency instability.
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