Central bank of Brazil has ordered Mastercard & Visa to suspend processing money transfers on behalf of Facebook’s WhatsApp Pay.
In line with a recent official announcement, the Central Bank of Brazil [BC] took action against WhatsApp Pay “to preserve an adequate competitive environment” and permit the central bank to assess the risks posed by the firm to the nation’s existing financial sector.
Visa & Mastercard will face heavy fines and administrative sanctions if they do not suspend activities associated with WhatsApp payments.
Assessing Any Associated Risks To The Existing Brazilian Payments System
The Central Bank has moved to suspend the operations of Facebook’s WhatsApp Pay within its borders, stating that it had been taking action to make sure “the functioning of an interoperable, fast, secure, transparent, open, & cheap payment system.” It revealed that this move will give the bank time to “assess any risks to the right functioning of the Brazilian Payments System and verify compliance.”
WhatsApp recently launched its payments system in Brazil earlier this month, following 2 years of testing in various emerging markets. Brazil is WhatsApp’s 2nd-largest market with over 120 Mln user base.
Brazil’s Upcoming Blockchain-Like Digital Payments System – PIX
Despite taking swift action against WhatsApp, Brazil’s central bank also added that the payments feature will likely be integrated with PIX – the central bank’s forthcoming blockchain-like digital payments system, expected to be launched soon.
While speaking to Bloomberg, a WhatsApp spokesperson stated the firm supports the PIX project and plans to integrate with the digital payments system, stating:
“We support the central bank’s PIX project on digital payments and along side our partners are committed to figure with the Central Bank to integrate our systems when PIX becomes available for all.”