Why the Central Bank of Brazil is blocking the payment project via WhatsApp

by bold-lichterman

The Central Bank of Brazil announced on Tuesday that it had ordered Visa and Mastercard to suspend their plans to provide a digital payment service through Facebook’s WhatsApp messaging system, amid concerns about open competition. This payment service was set up on June 15 in Brazil, a country with the second largest number of WhatsApp users in the world behind India.

It was the first time that WhatsApp was used as a means of payment. Facebook intends to make this service gradually available across its entire family of applications, including Instagram, and in other countries. The social network giant launched its “Facebook Pay” wallet in November, starting with the United States on the main platform and on Messenger, its other messenger.

“Preserve an adequate competitive environment”

But the Central Bank of Brazil, which regulates payment systems, has announced the suspension of service on WhatsApp for an indefinite period. “The reason for the central bank’s decision is to preserve an adequate competitive environment, ensuring interoperability, speed, security, transparency and the open and economic nature of the payment system”, explained the issuing institute.

The central bank has also expressed concern about the confidentiality of the data collected. WhatsApp is an end-to-end encrypted messaging system, used by more than 1.5 billion people worldwide every month, according to Statistica.