WhatsApp as one of the best online messaging applications wanted to expand their roots in Brazil and therefore they opted to start a money transfer service through their application within that region.
However, when the tech giant submitted an application for an approval of the transfer service to the central bank the bank said it could damage Brazil's existing payments system in terms of competition, efficiency and data privacy and therefore WhatsApp could not receive the desired permission and license for its initiative.
This was the latest setback for the tech giant’s effort to use its social media platforms to compete with banks and fintechs in allowing fast electronic funds transfers. Though on Tuesday this week the tech giant was granted permission to let its users send each other funds using the Visa Inc. and MasterCard card networks, months after vetoing WhatsApp's initial attempt. After the first rejection for approval the tech giant gave into the regulatory pressures and obtaining formal approval as a payments initiator using Visa and MasterCard as processors and trying to avoid becoming the financial service in Brazil. Both the MasterCard and Visa had to obtain renewals in permits to start operating with Facebook run WhatsApp.
The permission was granted a few months after the central bank started its own transfer service system in November, called Pix, which has since been widely adopted in the country.
Though, even after the permission the tech giant is allowed to do peer to peer payments only and is not allowed to interact with the merchants in any form of payments unlike Pix which can be used to provide payments to the businesses and individuals both while Facebook is still working hard towards getting an approval to transfer money to such large companies.
However, the approved payment method for WhatsApp by the central bank in Brazil has not started as of yet. It will probably take a few more weeks before it is officially set out for the public as final preparations for its launch are being done.
It is a big step by WhatsApp as a messaging application is starting a payment transfer method within a region with over 120 million users in it and while it is only limited to as smaller region currently we do know that if it goes successful WhatsApp will be seeking permission for this feature in other countries as well. WhatsApp has always delivered the very best it has to offer and we cannot wait to see what else will it be providing us in the future.
However, when the tech giant submitted an application for an approval of the transfer service to the central bank the bank said it could damage Brazil's existing payments system in terms of competition, efficiency and data privacy and therefore WhatsApp could not receive the desired permission and license for its initiative.
This was the latest setback for the tech giant’s effort to use its social media platforms to compete with banks and fintechs in allowing fast electronic funds transfers. Though on Tuesday this week the tech giant was granted permission to let its users send each other funds using the Visa Inc. and MasterCard card networks, months after vetoing WhatsApp's initial attempt. After the first rejection for approval the tech giant gave into the regulatory pressures and obtaining formal approval as a payments initiator using Visa and MasterCard as processors and trying to avoid becoming the financial service in Brazil. Both the MasterCard and Visa had to obtain renewals in permits to start operating with Facebook run WhatsApp.
The permission was granted a few months after the central bank started its own transfer service system in November, called Pix, which has since been widely adopted in the country.
Though, even after the permission the tech giant is allowed to do peer to peer payments only and is not allowed to interact with the merchants in any form of payments unlike Pix which can be used to provide payments to the businesses and individuals both while Facebook is still working hard towards getting an approval to transfer money to such large companies.
However, the approved payment method for WhatsApp by the central bank in Brazil has not started as of yet. It will probably take a few more weeks before it is officially set out for the public as final preparations for its launch are being done.
It is a big step by WhatsApp as a messaging application is starting a payment transfer method within a region with over 120 million users in it and while it is only limited to as smaller region currently we do know that if it goes successful WhatsApp will be seeking permission for this feature in other countries as well. WhatsApp has always delivered the very best it has to offer and we cannot wait to see what else will it be providing us in the future.
