Brazil’s reserve bank will again allow Facebook-owned WhatsApp to offer peer-to-peer payments services in the South American country.
The decision to permit WhatsApp to again facilitate transactions in Brazil has come nine months after the service had been suspended.
In June of last year, Brazil notably became the first country to carry out a countrywide launch of WhatsApp’s P2P payments platform. However, only 10 days after the launch, the Brazilian reserve bank decided to shut down the service, while asking Visa and Mastercard to suspend their plans to provide payments and transfers via WhatsApp.
At that particular time, the nation’s central bank stated that the payments service was not carrying the appropriate licenses. Brazilian officials had also cited concerns regarding competition and data privacy issues.
Now, the reserve bank of Brazil has stated that it has provided the required licenses to Facebook, Visa, and Mastercard that specifically pertain to “the usage of WhatsApp for initiating funds transfers among cardholders” from Visa and MasterCard “under the Facebook Pay program.”
The WhatsApp service can bring “new perspectives of cost reduction for users of payment services,” according to an official statement.
Following the initial suspension of the service, the reserve bank in Brazil has been offering its own PIX instant payments solution. The service allows residents, local firms, and government agencies to perform “instant” payments 24 hours a day, 7 days a week. These transactions are carried out via mobile phones, online banking, and local ATMs.
As covered, the PIX payments service was officially launched on November 16, 2020, after a few weeks of testing and had reportedly seen around 72 million registrations from individual consumers and local businesses, as of November of last year.
PIX is offered through a centralized settlement infrastructure, referred to as the Instant Payment System – which is operated by the Banco Central do Brasil, the nation’s reserve bank. The new service has been designed to promote competition in a market that’s dominated by a few large banks.
