FinTech: Brazil Clears Facebook’s WhatsApp For P2P Payments
However, Brazil’s Pix, a homegrown instant payments system, has a headstart on WhatsApp.
Banco Central Do Brasil (BCB), Brazil’s central bank, has given the green signal to WhatsApp, the messaging app owned by Facebook (NASDAQ: FB) to operate its payments service in Brazil. (Reuters)
The permission came nearly nine months after a regulatory fracas in which BCB ordered Visa Inc (NYSE: V) and Mastercard (NYSE: MA) to suspend payments transactions through the payments service then newly introduced by Facebook.
BCB also ordered WhatsApp to suspend its fledgling service until it could review its compliance with all the rules regarding “competition, efficiency and data privacy.”
During the time the service stood suspended, Brazil launched its own payments system known as Pix, which can be used to pay both individuals and businesses.
Further, there’s a catch to the BCB’s approval to WhatsApp: The messaging app can only process payments between its own users (P2P) and through Visa Inc (NYSE: V) and Mastercard (NYSE: MA) card networks. It also cannot yet process payments to merchants.
Moreover, WhatsApp will be regulated by the central bank. Notably, after the regulatory stumble in June, Facebook obtained formal approval as a payments initiator using Visa and Mastercard as processors. The latter also had to obtain clearance for the tie-up with Facebook.
It is not clear when Facebook will relaunch its WhatsApp payments service in Brazil, as it is still pursuing a license to process merchant payments.
However, a spokesperson said it’s “making the final preparations to have payments on WhatsApp available in Brazil as soon as possible.”
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