- The Central Bank of Brazil wants to check that the move from WhatsApp will help ensure “the functioning of a payment system that’s interchangeable, fast, secure, transparent, open and cheap”.
- The announcement of the new service, which involved a partnership with Mastercard, was only revealed last week.
- “Our goal is to provide digital payments to all WhatsApp users in Brazil using an open model and we will continue to work with local partners and the Central Bank to make this possible,” WhatsApp said in a response.
The proposed payment service from Facebook-owned messaging service WhatsApp has hit a stumbling block after a central bank temporarily blocked its plans for an online money transfer system.
The Central Bank of Brazil said that it had made the decision on several different grounds, including transparency and speed.
In a statement posted on its website, the Central Bank said that it planned to carry out a risk assessment of the proposed service on the basis of the potential impact to payment systems in the South American nation.
It wants to “preserve an adequate competitive environment, that ensures the functioning of a payment system that’s interchangeable, fast, secure, transparent, open and cheap,” it said.
It will also require Visa and Mastercard to cease offering payment services via WhatsApp.
The move from WhatsApp and Facebook was announced by the social media and messaging giants only last week.
WhatsApp sounded a conciliatory tone in its public response to the decision, claiming that it will collaborate with the Central Bank “to make this possible”.
“Our goal is to provide digital payments to all WhatsApp users in Brazil using an open model and we will continue to work with local partners and the Central Bank to make this possible,” WhatsApp said.
”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,” it added.
PIX is a system for real-time payments that is under consideration in Brazil.
The move will inevitably be a disappointment for WhatsApp and Facebook, however.
The system was announced to much fanfare last week, and the company shared plans for features such as small business payments.
In a statement at the time, its chief operating officer Matt Idema said: “We are very excited to bring payments on WhatsApp to our users across Brazil.
“Making it easier to send and receive money could not be more important than at a time like this.”
According to a report in Bloomberg, both the Central Bank and Facebook/WhatsApp were apparently in contact with each other before the system went live.
The same report claimed that Facebook and WhatsApp were surprised by the development.
If you would like to find out further information about how the international money transfer market is working and what steps firms are taking when it comes to offering payments services, check out our news section.
