WhatsApp will soon be able to restart its payment service in Brazil. According to Reuters, the country’s central bank has approved peer-to-peer payments for messaging services owned by Facebook, allowing users to use Visa and Mastercard-issued cards to send money to each other.
WhatsApp initially launched a payment function in its second-largest market in June 2020, but the Central Bank of Brazil quickly ordered the service to be suspended so that it can investigate whether it complies with all the rules on “competition, efficiency and data privacy.” Banking authorities also stated that the service failed to obtain the necessary licenses.
WhatsApp apparently tried to avoid being classified as a financial services company by relying on Visa and Mastercard’s existing banking licenses. However, this was useless: the central bank told the two payment processors that if they did not want to be fined, they must stop their transfers via WhatsApp.
WhatsApp must seek regulatory approval to process payments, while Visa and Mastercard must obtain new permits to use messaging services.
The payment feature has no launch date yet, but a spokesperson said that it is “making final preparations to provide payment to WhatsApp in Brazil as soon as possible.” However, even after it becomes available, users will not be able to use it to make purchases.
WhatsApp initially launched this feature to make it easy for local merchants to accept digital payments because local businesses in Brazil and India have already used it as their main online business. When the feature is first available, it will be impossible, but Reuters said that Facebook is seeking to approve merchant payments.