However, the blockade by Brazil’s central bank remains in force.

CADE, Brazil’s antitrust regulator, has lifted its embargo on the payments service launched recently by WhatsApp, the messaging service owned by Facebook (NASDAQ: FB) in partnership with Brazilian card processor Cielo SA. (Reuters)

The Administrative Council for Economic Defense (CADE), the Brazilian antitrust watchdog, had blocked the Facebook-Cielo tie-up on June 23, “to mitigate potential harm to competition.”

“Such user base would be difficult to create or replicate by Cielo’s competitors, especially should the partnership under investigation involve exclusivity between the parties,” CADE had said.

Cielo-Facebook representation works

In response, Facebook and Cielo had represented to the regulator that their arrangement was not exclusive and that Cielo’s peers may also enter similar arrangements on the WhatsApp service.

The two companies also emphasized before CADE that they were in different businesses and had only entered an agreement on financial services.

Accordingly, their agreement would not cause any concentration of market power. “Facebook and WhatsApp will just offer an additional channel for payments transaction between consumers and merchants,” the companies wrote.

CADE thaws

On Tuesday, CADE revoked its suspension of the Facebook-Cielo arrangement.

It said that clarifications provided by the two companies appeared to confirm that their deal does not limit the entry of rivals nor does it reduce consumers’ choice.

“We are glad Cade acted quickly to lift its preventive restrictions on WhatsApp Payments,” responded a representative for WhatsApp. “We look forward to continuing to work with Brazilian authorities to restore the service soon and allow all WhatsApp users in Brazil to send money to friends and family or purchase a product right on WhatsApp.”

Banco Central Do Brasil (BCB), the Brazilian central bank unmoved

Though the rollback by CADE is undoubtedly a favorable development for the new payments service, there’s still the matter of the clampdown by the  Banco Central Do Brasil (BCB), the central bank.

The BCB had barred Visa and MasterCard from initiating payments and transfers through the WhatsApp messaging app.

“Initiation or continuity of operations without the prior analysis of the Regulator might cause irretrievable damage to the SPB, particularly with regard to competition, efficiency and data privacy issues,” the BCB had said.

WhatsApp said June 25, however, that the BCB was working with Visa (NYSE: V) and Mastercard (NYSE: MA)  to find a way to restore the new payments service.

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