ANTITRUST

Facebook, Cielo Ask Brazilian Watchdog To Allow WhatsApp Payments

Facebook and Cielo are requesting that Cade, Brazil's antitrust watchdog, overturn the suspension of WhatsApp's payment system rollout in the country, Reuters reported.

The companies argued that their agreements are not exclusive, and other countries would be allowed to forge agreements with WhatsApp as well. They also said they are not in the same business and had only entered into a financial services agreement that they argued wouldn't pose a threat of market consolidation.

The decision to block the payment system came last week as Brazil's government had concerns about anti-competitive issues if WhatsApp, which is tremendously popular in the country, was allowed to roll out the new system. Brazil, with 120 million users of WhatsApp in the country, is the second largest market for the app, PYMNTS reported.

The companies said Facebook and WhatsApp "will just offer an additional channel for payments transaction between consumers and merchants," Reuters reported. The document was filed on Friday (June 26), but only made available on Monday (June 29).

The agreement is for WhatsApp to partner with Cielo, which is Brazil's largest credit and debit card operator, along with Mastercard and Visa, in order to add a payments function to the popular messaging app.

But Cielo, as the only card acquirer in the deal, is being looked at by regulators to ensure that there would be no favoritism in the future. Cade said WhatsApp has the potential to boost Cielo card transactions by at least 10 percent, PYMNTS reported.

Despite the problems, WhatsApp said late last week that it had been in talks with officials to ensure the payment system will come out eventually. Company head Will Cathcart said the bank had seemed to support companies like his making strides toward digital innovation.

WhatsApp has been testing its payment app in some of its more popular markets, including Mexico and India, for months now. It would allow people to send and receive money using Facebook Pay through the WhatsApp service.

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