Facebook-owned messaging platform- WhatsApp has announced the relaunch of its money-transfer services for users in Brazil, after being blocked by the central bank a year ago. Notably, Brazil is the second nation where the messaging giant introduced money transfer solutions. In India, the company’s largest market with nearly 400 million users gained approval to commence financial services in November 2020.
Through the use of pre-paid or debit card numbers, WhatsApp’s 120 million user base in Brazil will be able to transact up to 5,000 reais each month via the messaging service at no cost. At first, the system will not permit each transaction to cross 1,000 reais or over 20 transactions a day.
Matthew Idema, COO, WhatsApp, was reportedly quoted stating that the new feature will be phased. Initially, a restricted and undisclosed number of customers will receive a payment tool in their application. Through that, they will be allowed to invite new users.
Idema further mentioned that the central bank is in talks with the social media giant- Facebook, and is focusing on launching merchant payments in 2021.
Sources close to the news reveal that WhatsApp had introduced its payments solutions in Brazil, although the central bank suspended it claiming that it may tarnish the nation’s prevailing payment ecosystem in terms of efficiency, competition, and data privacy.
Along with reviewing the payment network, the monetary authority has also requested the technology company to be labeled as a financial service firm in Brazil, advising Facebook to design a new unit named Facebook Pagamentos do Brasil, which is currently administered by the central bank.
However, the central bank of Brazil has still not greenlit payments with the merchants, which will be a paid service, adding an extra line of revenue for the company.
Citing reliable sources, WhatsApp introduced its payment services in alliance with leading card network companies like Mastercard, Visa Inc. along with payments processor Cielo SA. It is expected to operate with cards from Banco Bradesco SA, Banco do Brasil SA, Itau Unibanco Holding SA ,Mercado Pago by MercadoLibre, Sicredi, and fintech firm Nubank.