Brazil suspends Whatsapp’s payments service days after launch
Whatsapp’s payments service has been suspended only a week after it launched in its first territory, as Brazil’s central bank said it was not given enough time to assess the new technology.
The central bank said it was taking the decision to “preserve an adequate competitive environment” within the mobile payments sector, and to ensure “functioning of a payment system that’s interchangeable, fast, secure, transparent, open and cheap”.
The move is a major setback for Whatsapp parent Facebook, which only rolled out the Whatsapp Pay service in Brazil a week ago after a lengthy trial phase in India. It has yet to receive regulatory approval to officially launch the service in India nationally.
Brazilian banks have asked payments partners Mastercard and Visa to halt all money transfers on Whatsapp while the investigation is ongoing. Those who do not comply with the central bank’s order to cease transactions could face fines and administrative sanctions.
In a statement, Brazil’s central bank said it had not been afforded the opportunity to sufficiently analyse Whatsapp Pay before it was launched in the country.
The central bank in Brazil is preparing to launch its own digital payments service PIX later this year, and has already established connections with up to 1,000 industry partners.
A Whatsapp spokesperson said: “Our goal is to provide digital payments to all Whatsapp users in Brazil using an open model and we will continue to work with local partners and the central bank to make this possible.
“In addition, we support the central bank’s PIX project on digital payments and together with our partners are committed to work with the central bank to integrate our systems when PIX becomes available.”
With Whatsapp Pay, users can send payments inside a Whatsapp chat to individuals or businesses in a similar way to attaching a picture or video to a message. There is no fee for using the service, except for a small processing fee charged to businesses to receive payments.
Though it can be used for peer-to-peer payments, Facebook has been mapping out tools that can similarly serve the expansion of Whatsapp Business.
The firm launched Whatsapp Business in 2018, which allows businesses to send out marketing messages, browse product catalogues and answer customer queries.