WhatsApp Pay could start operating in Brazil this week
RIO DE JANEIRO, BRAZIL – WhatsApp payments should be available in Brazil as early as Tuesday, May 4th, in partnership with companies like Visa, Mastercard and Cielo. According to NeoFeed, WhatsApp Pay will be launched in stages and will initially target between only 1% and 2% of the 120 million Brazilian users.
Facebook, the company controlling WhatsApp, was granted authorization by the Central Bank to operate payments on the app in late March – the system is currently operating in other countries, including India. When asked, the big tech’s press office did not confirm – nor deny – the launch of the new tool this Tuesday.
Since the Central Bank approval, the launch of WhatsApp Pay has been deferred twice, in order to ensure more time for testing and user experience, transfer of chargebacks, among other aspects, which would have been solved by the responsible teams.
The tool will accept payments using Mastercard and Visa, with processing handled by Cielo.
São Paulo users should be the first to test WhatsApp Pay, which has plans to start its second rollout phase in June with expansion to two more regions of the country, and a full rollout in July all over Brazil. However, the expansion will depend on how well WhatsApp Pay performs in the preceding phases.
The launch is expected to have a big impact on the payments market, increasing the number of digital transactions, decreasing cash in circulation, and marking the entry of big techs into the Brazilian financial market. Part of the market, among them large banks, fears abuse of financial power, since Facebook is one of the world’s largest companies.
Despite concerns, large banks in the country such as Itaú, Bradesco, Santander, Banco do Brasil and Caixa should embrace the new tool, as they have been striving to increase innovation and reduce the impact of the digital sector on more traditional financial institutions.
Another market concern with the launch of WhatsApp Pay is related to data security, a long-standing Facebook “Achilles heel.” WhatsApp will collect sensitive data such as the users’ CPF (individual taxpayer registry), bank account, cell phone number, social network and location data, and the question now is how the data will be used in the future.
According to financial market experts, WhatsApp Pay will also compete with Pix, the Central Bank’s digital transaction system, which was launched in November 2020 and has now been adopted by 70% of the country’s banked population. On the other hand, it will give more space to payment card companies, which have been adversely impacted by the instant payment system.
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This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief