WhatsApp receives nod to offer payment service in Brazil

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acebook-owned instant messaging app WhatsApp has reportedly received clearance to begin a payment service in Brazil.

The clearance issued by Brazil’s central bank allows WhatsApp messaging service to let its users send each other funds using the Visa and Mastercard card networks.

This comes after a bit of a rocky start for the messaging app – last year, the Brazilian regulator vetoed WhatsApp’s initial attempt to roll out the transfer service, saying it could adversely affect the current payments system in the country with regard to efficiency, data privacy, and competition.

WhatsApp initially refused to become a financial services company in Brazil by trying to utilise Visa and Mastercard’s existing central bank licenses to support its goal. However, it later succumbed to regulatory compulsion and obtained formal approval with Visa and Mastercard also obtaining new permits to operate as payment processors for the messaging app.

The messaging app, which will be regulated by the central bank, is only allowed to facilitate peer-to-peer payments. The approval follows the launch of an instant payments system, dubbed PIX, by Brazil’s central bank in November. PIX, unlike WhatsApp, enables payment to businesses as well as individuals.

Aside from its WhatsApp venture, Facebook has also been putting more effort into adding payments to its other social media apps. Last year, it announced the launch of Instagram Shops, with the aim of helping businesses navigate the Covid-19 crisis. The feature is an immersive full-screen storefront, designed to enable businesses “to build their brand story and drive product discovery”.

People can visit a shop from a business' Instagram profile or through feed and Stories. Once they're at the shop, they can browse products, explore collections and make purchases – through an in-app browser or without leaving the app via Instagram’s Checkout feature.