Central Bank Will Approve “WhatsApp Pay” in Brazil, Says Bank President

RIO DE JANEIRO, BRAZIL – Brazil’s Central Bank (BCB) is expected to approve WhatsApp Pay in Brazil, a service that will allow payments to be made through the messaging social media, which belongs to Facebook.

According to information from Bloomberg, Central Bank President Roberto Campos Neto said, during his participation in the Bloomberg Emerging + Frontier forum, on Wednesday, September 2nd, that the feature “would be approved” .

The Central Bank (BCB) president said that initially the authority considered the Facebook proposal too large to be expedited.

“It was a large setup, with over 100 million people, so it could influence the market. We asked them to follow the standard authorization route like any other agreement,” he told the news agency. “Our main concern was whether it would promote competition and protect people’s data,” he added.

According to Bloomberg, Facebook is also pursuing release from its partnership with MasterCard and Cielo even as the BCB is discussing alternatives with other participants.

Campos Neto added that he has discussed with Alphabet how to enable Google Pay in Brazil, and also talked with Paypal’s CEO, Daniel Schulman.

Asked if WeChat – the Chinese social media and Tencent payment App – could also try to enter the country, he said that although all companies are welcome, the Central Bank will look at the “market fragmentation,” because when “there are independent clusters, they are not connected and it becomes very difficult for the Central Bank to monitor.”

The news comes just over two months after the ban on launching the messaging App’s payment function. The Central Bank suspended the service that had just been announced in late June. Later, in early August, the monetary authority released a note permitting tests, provided that no real operations were conducted with users.

The Visa and Mastercard brands had already requested the Central Bank to act directly on the App and have provided the requested information.

In a note, Facebook stated that there are no plans to release the service just yet. “Despite the ongoing dialogue with the Central Bank, there are still no plans to release payments through WhatsApp.”

Cielo also reported that it is still “waiting” and has not been officially notified of any progress in the process.

How it will work

In the service launch announcement, Facebook had advised that the feature would initially work for Banco do Brasil, Nubank, and Sicredi customers who had Visa and Mastercard cards. The feature would work in partnership with Cielo. But the social media giant had already made it clear that the model would be open and that new partners could emerge in the future.

If approved, payment on WhatsApp will be activated by Facebook Pay. Transfers and payments will be protected by several security levels, such as the Facebook Pay PIN or biometrics on devices that have the feature.

Person-to-person transfers can only be made with debit cards. Users will have a limit of R$1,000 (US$200) per transaction and 20 operations per day, but with an overall limit of R$ 5,000 per month.

Payments to companies will not be limited in terms of amount and can be made through debit and credit cards, but initially, the feature would only be available to companies that have an account with the three financial institutions mentioned above.

Only transactions within Brazil and in reais will be authorized and consumers will be exempt of taxes when making transfers or purchases.

By linking an existing Cielo account or creating a new one and enabling Facebook Pay, small and medium-sized businesses that use the WhatsApp Business App will be able to request and receive unlimited credit or debit payments, offer refunds and get 24-hour support.

Commercial businesses pay a flat fee of 3.99 percent per transaction. Cielo’s fees range from 2.39 percent (debit) to 4.99 percent (credit), according to information on the buyer’s website.

Source: InfoMoney