The news comes months after a failed attempt at the same, Reuters reported. In June, WhatsApp was deemed by the central bank to be damaging to Brazil’s existing payment system for completion, efficiency and data privacy. It had also not obtained the right licenses, according to the bank at that time.
WhatsApp’s payment feature is Facebook’s attempt at keeping up with banks and FinTechs in allowing for quick digital transfers, according to Reuters. The company has gained approval after the central bank launched its own instant payments system, Pix, in November.
WhatsApp didn’t initially want to be a financial services company in Brazil, only looking to ride the central bank licenses of Visa and Mastercard. However, regulatory pressure descended, and the company began to obtain its own financial approval. Visa and Mastercard both had to get new permits to operate with WhatsApp, which will be controlled by Brazil’s central bank, Reuters reported.
For now, WhatsApp is only allowed to do peer-to-peer (P2P) payments; merchants cannot be involved, according to Reuters.
Brazil went through some WhatsApp turmoil last year, suspending the app over antitrust concerns and forcing Visa and Mastercard to stop doing business with it for a time. The central bank said it would be looking at how the app functioned as a competitive, secure, cost-effective force.
The central conflicts of the issue were “consumer choice,” whether the central bank had the right to step in for an app that is popular with consumers, and how much the service would help small businesses.