- WhatsApp, which is owned by Facebook and has its payments capabilities powered by Visa Direct, has announced that it will now be able to operate in the major South American economy following the green light from the central bank there.
- The development comes after months of wrangling between the organisations, with Facebook eventually being told that it had to set up a separate entity to route its payments services through.
- A senior figure at Visa Direct said that the company has “ongoing conversations” with regulators in the country, where cash is considered to be important.
A leading social media messaging service has been given the green light to operate its payments and online money transfer arm in Brazil once more – following almost a year of wrangling with the authorities.
Brazil’s central bank has given WhatsApp the right to let its peer-to-peer payment systems go live.
This move is expected to affect over 100 million users of the platform in Brazil.
It comes after the Central Bank of Brazil brought up potential issues with the site in early summer last year.
It was concerned that the arrival of the service might risk the levels of competition that were in place.
WhatsApp’s owner, Facebook, was told that it could only operate in the major South American nation if it was treated as a regulated financial services firm.
As a result, the company has now launched the ‘Facebook Pagamentos do Brasil’ organisation as a vehicle for its payments services.
One of the most interesting aspects of Facebook’s launch in the country is the fact that it is powered by another multinational service – Visa Direct.
In a statement, a senior figure there claimed that the major competition doesn’t come from online payments services but rather from the use of cash.
Ruben Salazar, who serves as the global head of Visa Direct, claimed that Facebook, Visa and the Central Bank were helping to fuel increased consumer choice.
“What the government and the private sector are doing collectively is to create consumer choice – which is necessary for a market to evolve,” he said.
He went on to say that choice helped improve the functioning of the market.
“If we only offer one choice, there is no freedom for the consumer to really choose what is best or better, based on their own personal economics,” he added.
He also clarified Visa’s position when it comes to working with the Brazilian regulators in a constructive manner.
“We have ongoing conversations with [the regulators] currently and continue to provide all the information they request and as does Facebook,” he said.
“I think hopefully it will only be a matter of time for a decision to be taken regarding how they see us operating in that environment as well.”
WhatsApp is just one of a huge variety of technology firms operating in this sphere – to get more information about what they all do and how you can make the most of their offers for your cross-border payments, just read our reviews section.
