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Barely a week after Facebook launched WhatsApp payment service in the Brazil, the country’s banking regulator has asked payment service providers to cease using the platform for facilitating transactions.
Brazil’s central bank has ordered on Thursday Visa and Mastercard to suspend the initiation of activities to, or to immediately cease making use of the WhatsApp application for initiating payments and transfers within the scope of the arrangements implemented by these supervised entities.
When WhatsApp launched its payment service in Brazil last week, the messaging platform said it will support debit or credit card transactions from Banco do Brasil, Nubank, and Sicredi via Visa and Mastercard networks. At the time of launch, the Facebook-owned company said it was working with Brazil-based payments processor Cielo, and that it was also open to include more partners in future.
The banking regulator’s decision has dealt a blow to Facebook’s digital payment plans in the South American country.
The regulator’s move was motivated by the importance of maintaining an adequate competitive environment in Brazil. It added that this order will pave way for a payments platform that is interoperable, fast, transparent, safe and inexpensive.
The measure will allow the central bank to assess any risks to the proper functioning of the country’s payment system and to verify compliance with the principles and rules set out in the law that governs payment schemes in the country.
“The occasional initiation or continuity of operations without the prior analysis of the Regulator might cause irretrievable damage to Brazil’s Payment System, particularly with regard to competition, efficiency and data privacy issues,” the bank said in a statement.
Brazil is the second largest market for WhatsApp after India. And the Facebook-owned messaging platform is yet to get regulatory approval to expand its payment services in India.
Testing WhatsApp Pay in the Asian nation began about two years ago. Apart from India, WhatsApp has been testing its payment feature in Mexico.
