FinTech: Facebook’s WhatsApp Talking to Brazilian Regulators for Rollback of Payments Suspension

June 30, 2020 | FinTech, News
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It’s possible that Brazilian regulators may thaw after the ongoing discussions.

Reuters reported Thursday that WhatsApp, the messaging service owned by Facebook Inc (NASDAQ: FB) is hoping that Brazil’s central bank may allow it to resume its newly-launched payments service in the country.

WhatsApp said that the central bank was working with Visa (NYSE: V) and Mastercard (NYSE: MA) to find a way to restore the service.

Last week, Banco Central Do Brasil (BCB), the Brazilian central bank, ordered Visa and MasterCard to suspend payments transactions through the payment service of the message application.

“The central bank made clear that they support platforms like WhatsApp that are innovating in digital payments,” said Will Cathcart, Head of WhatsApp, as quoted by Reuters.

Facebook’s WhatsApp and Cielo knock on Cade’s door

According to a Reuters report dated June 29, both Facebook and payments processor Cielo SA have made a representation to Cade, the Brazilian antitrust regulator, to reverse its suspension of their agreement.

Last week, Cade blocked Cielo from continuing the arrangement.

In their representation, the two companies made the following points:

  • Their agreement was not exclusive
  • Card acquirers that are rivals to Cielo may also enter deals with WhatsApp
  • Facebook and Cielo were not in the same business
  • They had merely entered a financial services agreement
  • Therefore their tie-up would not lead to any market concentration

“Facebook and WhatsApp will just offer an additional channel for payments transaction between consumers and merchants,” the companies wrote.

Related Story:  Facebook’s WhatsApp Payments Service Hits Regulatory Wall in Brazil                                                 

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