Brazil allows WhatsApp Pay despite initial objections

Brazil’s central bank allows WhatsApp users to send money to each other via WhatsApp Pay using Visa and Mastercard credit cards. That while the bank tried to block the payment service for months for fear of unfair competition.

WhatsApp has been trying to introduce WhatsApp Pay in Brazil since June last year, Reuters writes, but until now that attempt has been blocked by the Brazilian central bank, because WhatsApp Pay would be unfair competition for existing payment services in Brazil and because of privacy. The service is said to have failed to obtain the necessary permits in the country. With about 120 million users, Brazil is the second largest market for WhatsApp worldwide after India.

In November, the country’s central bank released its own digital payments service called Pix. That service is comparable to Tikkie and is now popular in Brazil. Pix is ​​also used by companies.

Since the central bank’s veto in June, WhatsApp has been trying to gain access to the payment market in Brazil via Visa and Mastercard. When that failed, WhatsApp formally registered as a payment service and applied for the necessary permits.

WhatsApp Pay will only be available in Brazil for mutual payments between people, so not for companies. Visa and Mastercard process the payments. These companies also had to apply for new permits for this. Facebook is also trying to get permission to process business payments, but nothing is known about this for the time being. WhatsApp has in Brazil about 120 million users.

The payment service should eventually not only be available in Brazil, but worldwide. The service has been tested in India since 2018 and since November last year WhatsApp has been formally allowed to process payments with UPI, India’s main digital payment service. However, the number of users is limited: only 20 million of the 400 million WhatsApp users in India are allowed to use WhatsApp Pay. The service is still rarely used there.