The Central Bank of Brazil suspended WhatsApp’s Facebook payments function in the country, just over a week after the messaging service announced its launch, Bloomberg reports. In a statement, the central bank said it had made the decision to guarantee competition in the payment systems market. Bloomberg He notes that the bank will use the suspension to assess potential risks to the country’s payment infrastructure and to determine if WhatsApp complies with the regulation.
The suspension on the second largest WhatsApp market is the latest setback for Facebook’s payment ambitions. Despite the beta launch in 2018 in India (WhatsApp’s largest market), TechCrunch reports that parent company Facebook has struggled to obtain regulatory approval for the service, avoiding a wider deployment. Facebook missed its goal of making the service available across the country late last year. The WhatsApp payment service has also been tested in Mexico.
WhatsApp hoped that its payment system could be used by people to pay for businesses and transfer money to individuals. The service would be free to individuals, but would charge companies a 3.99 percent processing fee. In countries like India and Brazil, WhatsApp often serves as the primary online presence for many small businesses. According to more than 5 million merchants worldwide, they use the commercial version of the application. Bloomberg.
Bloomberg reports that WhatsApp was surprised by the decision of the Central Bank of Brazil, since the company had been in regular contact with the authority. WhatsApp had started a small test of the service in the country about a month before its launch. “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,” WhatsApp said in a statement given to Bloomberg. He added that he plans to support the Central Bank’s instant payment system, which will launch in November.
The Brazilian Central Bank has requested that Mastercard and Visa stop allowing payment and money transfers through the application, and warned that they could face fines for non-compliance.
