A week after the start of WhatsApp Pay in Brazil, the central bank there stops Facebook’s payment system. It calls for a preliminary analysis of the impact of the service and warns that the country’s payment transactions could suffer – in terms of competition, efficiency and data protection of users.
With WhatsApp Pay, money can be transferred directly in chats. Facebook is planning a cross-company payment system. Brazil is one of the largest WhatsApp markets, with 120 million people using Messenger there.
No approval, just an intermediary
Facebook introduced WhatsApp Pay without the approval of the central bank or other agency and explains this according to Reuters with the fact that it is only an intermediary service. In order to transfer funds via WhatsApp, users must store their credit card details in the messenger account or create a link to PayPal. Then one click is enough and the money is transferred to the person you are talking to, who can also be a company.
WhatsApp offers shops to display goods catalogs directly in Messenger – currently no purchase could be completed faster than with this combination of offer and payment button. So that no unauthorized payments go out, Facebook requests a six-digit PIN or the fingerprint on the smartphone. Companies that want to offer WhatsApp Pay have to pay a fee, private individuals use the service free of charge.
The Central Bank has instructed Mastercard and Visa not to carry out the transactions concluded via WhatsApp. A WhatsApp spokesman told Reuters that the company wanted to continue working with local partners and the central bank to provide the service. The Brazilian central bank plans to launch its own payment system in autumn, which works similarly to that of Facebook – it is called Pix. WhatsApp can imagine integrating Pix into their own system as soon as it is available.