Last week there was a lot of buzz surrounding WhatsApp and its plan to launch a payment option in Brazil, following successful beta testing of the service in India. Now that plan has hit a bit of a roadblock, as the country’s Central Bank has suspended it, according to a report from Bloomberg.
The reason for the suspension is down to whether payments via a platform like WhatsApp are viewed as above board from a regulatory perspective.
In explaining its decision, the Central Bank noted in a statement that WhatsApp’s payment service needed to, “Preserve an adequate competitive environment, that ensures the functioning of a payment system that’s interchangeable, fast, secure, transparent, open and cheap.”
The authority has also instructed Mastercard and Visa to no longer facilitate payments via WhatsApp at this time, or run the risk of incurring massive fines.
When the aforementioned elements listed by the Central Bank can be proven to be true of the service, then it looks like it will get the green light from regulators.
That said, the decision by the Central Bank has come as a shock to Facebook (which owns WhatsApp) executives, who have been in regular contact with the organisation throughout the planning process and prior to last week’s announcement.
It is also worth mentioning, as The Verge points out, that WhatsApp had similarly rigorous regulatory hurdles to overcome while beta testing the service in India in 2018, which halted any chance of a commercial rollout in the country too.
“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,” an unnamed WhatsApp spokesperson noted.
With Facebook’s other monetary venture, Libra, also facing heavy scrutiny from regulators, it looks like the company’s plans to launch digital and fintech solutions, will not be without their setbacks.
For now it remains to be seen what will happen in other regions where WhatsApp’s payment service was planned to rollout after Brazil.[Image – Photo by Yucel Moran on Unsplash]