WhatsApp Pay’s Suspension Due to Regulatory Issues in Brazil Could Stall its Expansion into Africa
Facebook’s WhatsApp Pay may not launch any time soon in Africa as the digital payment service has been suspended by the regulatory body in Brazil, its first market.
WhatsApp Pay’s suspension by Brazil’s Central Bank comes after the digital payment service launched in the market earlier this month.
According to Brazil’s apex bank, the Payment service was suspended to preserve an adequate competitive environment in the space.
“We aim to preserve an adequate competitive environment, that ensures the functioning of a payment system that’s interchangeable, fast, secure, transparent, open and cheap,”Central Bank of Brazil
The body also requested Mastercard and Visa who are partners for payments service in the country, to discontinue payment and money transfer activities through WhatsApp in line with the suspension.
WhatsApp Pay’s disruptive Power
Brazil is WhatsApp’s second-largest market with more than 120 million users. The initial launch of the WhatsApp digital payment service was a major milestone for Facebook as it kicked off the payment service that it has been working on for years.
Its suspension is, therefore, a huge setback for Facebook’s long-term goal of offering commercial services within the instant messenger as it could affect the timeline of the pending launch of the payments service globally.
WhatsApp Pay launched in Brazil last week!
Also, seeing as the disruptive power of the payment service is evident in Brazil, it’s possible that similar issues may surface in more countries when it starts to roll out globally.
The suspension is, however, not an end to WhatsApp Pay. In its statement, Brazil’s Central bank suggested that the ban was because it hadn’t had the opportunity to analyse the payment service prior to its rollout. So it’s possible that WhatsApp resumes fully once the analysis is done.
Also, WhatsApp has said it’s ready to work with the regulators. Speaking about the suspension, a WhatsApp spokesperson revealed that the company is ready to work with both local banks and the regulatory body to find a workable model.
”In addition, we support the Central Bank’s PIX project on digital payments and together with our partners are committed to work with the Central Bank to integrate our systems when PIX becomes available,”WhatsApp Spokesman
It’s unclear if Visa and Mastercard have suspended their services on WhatsApp but failure to comply with the bank authorities order could subject them to fines and administrative sanctions.
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