The Central Bank of Brazil, on Tuesday, 23rd June 2020, ordered Visa and Mastercard to suspend the rollout of WhatsApp Payments service, citing fears that the service would be anti-competitive. The decision will set back Facebook, who introduced the service less than two weeks ago, looking to further its plans to introduce commerce on the messaging platform.
A statement from the bank reveals that its decision seeks to “preserve an adequate competitive environment that ensures the functioning of a payment system that’s interchangeable, fast, secure, transparent, open and cheap.”
The bank promised to evaluate possible risks of WhatsApp Payments to the country’s payment system. Further, it will also weigh whether Facebook’s payment system meets the necessary regulatory requirements.
The bank also cited concerns over data privacy and efficiency, warning possible fines to Mastercard and Visa if they failed to comply.
In February this year, the Central Bank of Brazil proposed Project Pix, an instant payments system that will allow peer to peer money transfers, bill payments, and payments for service fees. Users can complete payments by scanning a QR code or using an address key. During its launch, the Central bank promised that private market players would develop the system, whereas the bank would offer addressing and settlement of transactions. PIx woulds also allow direct instant payments to e-commerce, similar to WhatsApp payments.
Facebook to Integrate WhatsApp Payments with Pix
In response, WhatsApp pledged their support for the country’s digital payments system, promising to work with local partners and the central bank. Further, Bloomberg cites that WhatsApp is willing to integrate their system with Pix once it goes live.
“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. Besides, we support the Central Bank’s Pix project on digital payments and, together with our partners, are committed to working with the Central Bank to integrate our systems when Pix becomes available,” a WhatsApp spokesperson said.
