Brazil’s reserve bank has reportedly instructed Mastercard and Visa to suspend processing transactions on behalf of WhatsApp.
As reported on June 15, 2020, the Facebook-owned WhatsApp messaging platform began facilitating payments in Brazil.
However, the Central Bank of Brazil (BC) has now taken action against WhatsApp Pay in order “to preserve an adequate competitive environment” and to also allow the reserve bank to determine the risks involved with letting WhatsApp offer digital payments services in the South American nation.
Visa and Mastercard have reportedly been warned that they’ll have to pay heavy fines and may face administrative sanctions if they don’t suspend money transfers made via WhatsApp payments.
The reserve bank of Brazil has confirmed that it has suspended the operations of WhatsApp Pay in the country, while noting that it aims to ensure “the [proper] functioning of an interoperable, fast, secure, transparent, open, and cheap payment system” in Brazil.
The central bank also said it would be assessing and determining whether there are any risks to the proper functioning of the country’s existing payments system.
WhatsApp introduced its payments platform in Brazil this month, after testing it for several years in different emerging markets. Brazil is notably WhatsApp’s second-biggest global market with over 120 million customers.
WhatsApp was acquired by Facebook (NASDAQ:FB) in 2014 for approximately $19.3 billion. WhatsApp is the world’s most popular messaging application with over 2 billion users worldwide.
Brazil’s reserve bank also said that it would allow WhatsApp Payments to be integrated with PIX, the institution’s new digital payments system (not yet launched).
A WhatsApp representative told Bloomberg that the company supports the PIX initiative.
The representative stated:
“We support the central bank’s PIX project on digital payments and together with our partners are committed to work with the bank to integrate our systems when PIX becomes available.”