Whatsapp’s payment service, which officially debuted through a launch in Brazil, is already facing suspension, days after its launch. Brazil’s central bank has effectively suspended the digital payments platform in the country by ordering Mastercard and Visa — top WhatsApp payment partners — to immediately stop money transfers via the payments service.
The move comes as the bank fears that the launch of Whatsapp payments would be anti-competitive in nature. It also said that it didn’t have enough time to ‘analyze the service’. In addition to this, the bank also had concerns regarding Facebook’s data privacy policies and lack of accountability. The central bank said in a statement that rolling out the service without previous analysis by the monetary authority could damage the Brazilian payments system in the areas of competition, efficiency and data privacy.
“The reason for the central bank’s decision is to preserve an adequate competitive environment, ensuring an interoperable, fast, secure, transparent, open and economical payment system,” it said in a statement.
Whatsapp launched its payments app for the first time in Brazil just ten days ago after months of trial and testing. Brazil has the second-most WhatsApp users(over 120 million users) worldwide after India. This payments feature could be accessed directly within a conversation and was free for users.
This suspension could ring alarm bells in other markets as well, where Whatsapp has been waiting for years to get its payments platform out. Whatsapp has been testing its payments app in India and Mexico. In India it has been waiting to get approval from the RBI for the past two years, and there has been little movement. The most recent news suggested that Whatsapp is now in full compliance with RBI’s data localisation norms and could initiate service soon.
In Brazil, the central bank is also planning to launch its payments service, PIX around November. Due to this many people have criticized the central bank’s decision as a”step to removing completion” for its downpayment system.