WhatsApp Pay finally gets greenlight from Brazil’s central bank
WhatsApp Pay has finally cleared the way with regulators to relaunch its services in Brazil, after it was blocked in June 2020.
On 30 March, the country’s central bank approved peer-to-peer (P2P) payments for Facebook’s messaging service.
This will allow WhatsApp users to send each other funds on the Visa and Mastercard networks.
Brazil is the messaging app’s second-largest market, home to 120 million users WhatsApp users.
Just a week after it started operating in Brazil last June, regulators blindsided the Big Tech.
WhatsApp had claimed it had a good dialogue with local banks, payment firms and regulators.
Despite this, Brazil’s central bank told Visa and Mastercard to immediately stop processing payments and transfers made through the messaging service.
Then the country’s antitrust regulator Cade blocked WhatsApp’s partnership with the Brazilian firm Cielo, on grounds of competition concerns.
The central bank also said that the service failed to obtain the necessary licences. It said WhatsApp avoided calling itself a financial services firm and relied on Visa’s and Mastercard’s existing bank licenses.
WhatsApp has now obtained a formal approval as a payments initiator. Both card networks have also obtained new permits to operate with Facebook’s messaging app.
In the meantime, the central bank launched its own instant payments system back in November called Pix. According to Reuters, it has since been widely adopted.
WhatsApp is only allowed to do P2P payments in Brazil, which means no merchants are involved.
Unlike the central bank’s free Pix service, which can be used to pay businesses and individuals. Facebook is still seeking approval to operate with merchants.
“[We] are making the final preparations to have payments on WhatsApp available in Brazil as soon as possible,” a WhatsApp spokesperson said in a statement published by Reuters.
The messaging platform, which has over 120 million users in Brazil, did not say when it will start offering the service.
Similar friction in India
In November, Facebook has finally landed permission from regulators to launch WhatsApp Pay in its biggest market yet, India – home to more than 400 million users.
Delayed for years since its beta testing in 2018, the launch was a big step in the Big Tech’s financial expansion.
Reports from Business Standard suggested Facebook was close to permission from the National Payments Corporation of India (NPCI) back in February 2020. But it seems regulators put off the launch a further nine months.
The last two years have seen Facebook adapt its entry into the market, after regulators requested it host all payments data pertaining to India consumers in the country, as opposed to in the US.
The regulators also required Facebook to keep the data for WhatsApp Pay India entirely separate from other Facebook data.