Brazil’s Central Bank has suspended Facebook’s WhatsApp payments feature in the country, just over a week after the messaging service announced its launch, Bloomberg reports. In a statement, the central bank said that it had taken the decision to ensure competition in the payment system market. Bloomberg notes that the bank will use the suspension to evaluate potential risks to the country’s payment infrastructure, and to work out whether WhatsApp is compliant with regulation.
The suspension in WhatsApp’s second biggest market is the latest setback for Facebook’s payment ambitions. Despite launching in beta back in 2018 in India (WhatsApp’s largest market), TechCrunch reports that parent company Facebook has struggled to gain regulatory approval for the service, preventing a wider roll out. Facebook missed its target for the service to be available nationwide by the end of last year. The WhatsApp payment service is also been tested in Mexico
WhatsApp had hoped that its payments system could be used by people to pay businesses as well as transfer money to individuals. The service would be free for individuals but would charge businesses a 3.99 percent processing fee. In countries like India and Brazil, WhatsApp often serves as the main online presence for many small businesses. Over 5 million merchants around the world use the business version of the app, according to Bloomberg.
Bloomberg reports that WhatsApp was surprised by the Brazillian Central Bank’s decision, since the company had been in regular contact with the authority. WhatsApp had started a small test of the service in the country around a month prior to its launch. “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,” WhatsApp said in a statement given to Bloomberg. It added that it plans to support the Central Bank’s instant-payment system, which is scheduled to launch in November.
Brazil’s Central Bank requested that Mastercard and Visa stop enabling payment and money transfers through the app, and warned that they could face fines for non compliance.