On Tuesday, Brazil’s central bank cleared the way for Facebook’s WhatsApp messaging service to allow its users to send funds using Visa Inc and Mastercard, months after vetoing WhatsApp’s initial experience.
When WhatsApp tried to launch the translation service last June, the central bank said it could harm Brazil’s existing payment system in terms of competition, data efficiency and confidentiality, adding that the service had not received the necessary licenses.
Regulatory friction was the latest decline for Facebook an effort to use its social media platforms to compete with banks and fintech technologies to enable fast electronic funds transfers.
Regulatory approval comes months after the launch of the central bank own immediate payments a system in November called Pix, which has since been widely accepted.
After initially trying to avoid becoming a financial services company in Brazil and trying to take advantage of existing central bank licenses of Visa and Mastercard, WhatsApp succumbed to regulatory pressure by receiving official approval as a payment initiator using Visa and Mastercard as processors.
Both card networks also had to obtain new permissions to operate the Facebook messaging app, which will only be regulated by the central bank.
However, WhatsApp only has the right to make connections to partners, not involving merchants, unlike the free Pix service, which can be used to pay companies and individuals. Facebook is still seeking approval to work with merchants.
“(We) are making final preparations to provide WhatsApp payments in Brazil as soon as possible,” a WhatsApp spokesman said in a statement. The messaging platform, which has more than 120 million users in Brazil, did not say when it will start offering the service.
© Thomson Reuters 2021
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