The payment features of Whatsapp have been officially suspended in Brazil by the country’s central bank, ordering Mastercard and Visa to suspend money transfer processing on the chat application’s behalf.
Banning WhatsApp Pay Via Mastercard and Visa
Through the official information, the Central Bank of Brazil (CB) has taken action against WhatsApp Pay in order to preserve a competitive environment within the country. Alongside this, BC will now be capable of assessing the risks that the firm poses to the existing finance sector of Brazil itself.
Should Mastercard and Visa abstain from suspending these activities in regards to WhatsApp payments, they will face harsh administrative sanctions and fines, as retaliation.
Ensuring Brazil’s Financial Space Is Safe
The BC has taken various steps in order to suspend the operations of the Whatsapp Pay within the country’s borders. As reasons, it cited that the BC first needs to ensure that it operates as a fast, transparent, secure, interoperable, cheap, and open payment system. Afterward, it needs time to conclude whether or not this new Whatsapp Pay system will pose a risk to the proper functioning of the Brazilian Payments System. Furthermore, it must also verify WhatsApp Pay’s compliance with the regulations of the country.
WhatsApp had launched its payment system within Brazil just earlier this month, after it tested its service for more than two years across an array of emerging markets. Brazil stands as the second-largest market for WhatsApp, holding more than 120 million users on its own.
A Prospective Partner, Regardless
Even though the BC took swift action against WhatsApp, the central bank also announced that the payments feature would probably be integrated within PIX. PIX stands as the forthcoming blockchain-like digital payments system that Brazil’s central bank had been working on for some time now.
During an interview with Bloomberg, a spokesperson from WhatsApp gave a public statement in regards to the firm’s support of the PIX project. They stated that they wholeheartedly support the Central Bank’s digital payments projects. The spokesperson said that they would be capable of working with the PIX system, alongside their partners, should PIX become available.
It seems that Brazil’s looking forward to becoming another player in the crypto industry. While probably not as far ahead as the EU’s digital euro project, let alone the current leader, China’s DC/EP, it’s never too late to start. Venezuela has had its own form of crypto for some time now, the Petro, but this coin is mired in speculation and doubt.