Viber, the messaging app owned by Japanese e-commerce giant Rakuten, has long been dancing around the area of fintech, launching services like money transfer and chatbot payments in various countries over the years. Now, it is making a move to double down on that strategy: it’s launching Payments on Viber — a new service that will let users set up digital wallets tied to their Viber accounts.
Linked to other bank accounts as well as Visa and Mastercard, Payments wallets can in turn be used to make bill payments and buy goods, as well as transfer money to other individuals. Peer-to-peer transfers will be the first of these services to launch, and these will be free. Services like payments to businesses like will have some fees attached.
The service is being launched first in two markets — Germany and Greece — with the plan being to extend that to the rest of Europe, and then Viber’s wider global footprint of 180 countries, this year and next.
Viber CEO Ofir Eyal said the reasons for starting with these two countries first were strategic.
Greece is what he described as a “purple country”, where Viber is installed on the phones of some 91% of smartphone users in the country, working out to 7 million Viber users in a population of 10.7 million, and making P2P transfer more viable (there is an option to transfer money to non-Viber users, but it is less seamless, he said).
Germany, meanwhile has just 3 million Viber users, but Eyal described it as a “strong corridor” for transfers to Greece. Viber also happened to win a security award there recently, he said, “so brand perception is strong.”
For now, Viber’s pre-existing payment services — such as chatbot payments — will continue to stay in place where they are live — mainly Ukraine, Bulgaria and Hungary, Eyal said. These have to date facilitated “millions” of transfers, but as Payments expands, they will gradually be wound down with Payments functionality replacing them.
Viber has a large team of engineers working on its app — in addition to voice and video calls and text messaging, it provides a complement of other media and third-party integrations for users. But interestingly, this turn to fintech is being done in partnership with an outside partner.
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 noted that Viber might work with Rapyd in other markets, too, or it might opt for other partners. He also noted that Rakuten is not investing in Rapyd, nor does it have plans to. Viber might also incorporate services from Rakuten itself or companies that Rakuten does invest in as Payments and Viber’s fintech ambitions overall expand, he added. Viber is not handing the whole operation to Rapyd: it will be providing tech and data to fill out “KYC” aspects of the service.
Viber’s move to launch Payments comes at an interesting time.
Eyal told me that Viber has “in the neighborhood” of 250 million active users — a number that is significantly smaller than other messaging-first apps like WhatsApp and WeChat, whose active users number in the billions. It’s also a number that — as those other apps have grown in prominence — has declined over the years: in 2016, Viber was widely reported to have 823 million active users (one citation of this number from its PR firm here).
The idea with Payments is thus two-fold: it’s there to provide a service to Viber’s existing users to increase engagement and make the app more sticky; and it’s there to potentially attract new people to the platform.
It’s not out of the ordinary for a messaging app to provide payments: the likes of WeChat have built substantial businesses around payments. Meta, the parent of Facebook Messenger and WhatsApp, has long been interested in building out a similar “super app” profile, although it’s been very slow in its approach.
“We didn’t think mobile payments was such a big thing five years ago,” Eyal said of Viber’s own delays in moving faster on payments. “But then it caught fire in last 2-3 years,” especially around functionality to transfer money, which Viber witnessed first-hand through its own money transfer service. He said Viber is now taking an open-ended approach to how it develops Payments, seeing what catches on, and where. “We may well invest in growth, building channels and communities around e-commerce. Or we may experiment letting businesses show catalogues or individual shopping items.”
Realistically, though, it’s valid to ask if it’s too little and too late. In recent years, Apple and Google have made huge inroads in the area of mobile wallets alongside a lot of other fintech players, so It will be interesting to see whether there is an appetite, and a critical mass of consumers and businesses, looking for a similar solution within the messaging environment. Nevertheless, McKinsey figures, cited by Viber, project that there will be $2.5 trillion in global payments by 2025, so it remains a hot opportunity, one that a lot of established and newer entrants will be hoping to tap.
And for Viber, today’s news underscores an interesting shift for the app as led by its newest CEO (who took on the role less than a year ago). The company has long worked to build out “fun” features using stickers and GIFs and interesting turns on the promise of social shopping (surely a big area that its e-commerce-focused owner would like to grow longer term). This shift to digital wallets and payments is a signal of how Eyal wants to direct the app in the future.
“We had adventure with more fun, Snapchat content,” he said, referring to the partnership it struck with Snap for AR filters. “But we will never be the Snapchat of our region. It was always clear to me that our value was saving money when calling abroad, and we wanted to build on that.”
The idea of providing value and a service that no-one else is providing is especially poignant given Viber’s user base and what’s is going on in the world. The app’s two biggest markets are actually Ukraine and Russia, which today are at war with each other after Russia invaded Ukraine, unprovoked.
Although it’s currently not making any money in its Russian operation, Viber, which is end-to-end encrypted, has kept the service live where it hasn’t been blocked by Russian authorities, since a lot of communication happens between Ukrainians and Russians (there remain a lot of links between the people, despite the actions and rhetoric of the Russian government), and it’s continuing to operate its service in Ukraine where it can — the occupied territories where Russia has taken control of communications being the exception). It’s for now not launching payments in either country though because of the extreme currency instability, Eyal added.