Brazil Central Bank Cites Lack Of Competition In Shutting Down WhatsApp Payments

Brazil’s central bank has suspended WhatsApp’s payment feature in the country, citing antitrust concerns, according to Bloomberg on Tuesday (June 23).

Mastercard and Visa have been requested to stop payments and money transfer services through the app in Brazil as well, the bank said.

The bank said the decision was to “preserve an adequate competitive environment that ensures the functioning of a payment system that’s interchangeable, fast, secure, transparent, open and cheap,” Bloomberg reported.

The WhatsApp payment feature was introduced by parent company Facebook earlier this year in Brazil. The central bank’s decision is a setback for the social media giant. The WhatsApp payment feature, tested for the past several years in markets like India and Mexico, is a central function of its plan to offer commerce options within the app.

But Brazil’s suspension of the feature will let the central bank evaluate the possible risk to the country’s banking system, including potential threats to “competition, efficiency and data privacy,” the bank said, according to Bloomberg.

In a statement, a WhatsApp spokesperson said the company’s goal is “to provide digital payments to all WhatsApp users in Brazil using an open model.”

”In addition, we support the central bank’s PIX project on digital payments and together with our partners are committed to work with the central bank to integrate our systems when PIX becomes available,” the spokesperson said.

Over 5 million merchants worldwide use a business version of WhatsApp’s Messenger app. Many small businesses in Brazil and India utilize the app as the primary means of establishing an online presence.

Tiago Severo Gomes, a partner at Caputo, Bastos and Serra and a specialist in FinTechs and banking regulation, said the central bank’s order, since there was no further argument, was an unusual move in the field of payments.

Mastercard only recently partnered with WhatsApp in Brazil to facilitate payments, as did Visa.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.