Central Bank in Brazil suspends WhatsApp payments
All heroes have villains! In a recent article, I gave details of how Facebook gave hope to small business owners in Brazil. This was because of the payment system that was implemented on WhatsApp. However, just as The Joker is to Batman, can we say the Central Bank is to Facebook?
Only over a week after the payment features were implemented, Brazil’s central bank declared its suspension in the country. Bloomberg reports that the bank’s decision aims to ‘preserve an adequate competitive environment, that ensures the functioning of a payment that’s interchangeable, fast, secure, transparent, open and cheap’. Thus, the suspension would be used to assess potential risks and determine whether WhatsApp obeys regulations.
Evidently, Mastercard and Visa have been asked to disable transactions through the app, or face penalty. The partnership with Cielo has also been suspended indefinitely. Apparently, WhatsApp was caught off guard by the central bank’s decision. The company states that this is especially because it had been in contact with the authority and had even started a small test in the country, a month before the launch.
In addition, the company had even launched the payment system in beta over the past two years in small markets in India and Mexico. The idea has been a long-term plan to offer commerce within the app.
Once again, Bloomberg reports the words of a WhatsApp spokesperson “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.”
With over 5 million merchants using the business version globally, WhatsApp has been the major online platform for small business owners and retailers. Thus, this payment system should bring even more merchants online. However, Facebook has consistently tried to gain the approval of authorities, for their service. Hence, this has slowed down the progress of the project in reaching a larger audience.
Nonetheless, heroes always remain resilient. Facebook is pressing forward. The company now has plans to support the Central Bank’s instant payment system, which is said to be released by November.