The central bank of Brazil has ordered payment giants Mastercard and Visa to stop processing money transfers through Facebook-owned Whatsapp Pay. The Central Bank of Brazil suspended Whatsapp Pay to allow an adequate competitive environment. The suspension of this payment feature would also give the central bank time to assess the risks posed by Whatsapp to the country’s existing financial system. Visa and Mastercard might face heavy penalties and administrative sanctions if they do not suspend transfers with Whatsapp Pay.
The central bank will assess the risks concerning its own payment system.
The Central Bank of Brazil has suspended Facebook-owned Whatsapp Pay in the country. The bank reasoned that this action is taken to ensure “the functioning of an interoperable, fast, secure, transparent, open, and cheap payment system.” The central bank further stated that the suspending Whatsapp Pay would give the bank time to “assess any risks to the proper functioning of the Brazilian Payments System and verify compliance.” Brazil is WhatsApp’s second-largest market after India, with more than 120 million users. The messaging giant launched the payment feature earlier this month after testing it in various emerging markets including India.
“The payment feature makes sending money as easy as sharing a photo.”
The founder and the chief executive officer of Facebook, Mark Zuckerberg, had said that the Whatsapp Pay makes sending and receiving money as easy as sharing a picture. The Whatsapp pay feature is enabled by Facebook Pay, which is also in works in many countries, including the USA and UK. As reported earlier, the interest of people in South American countries in cryptocurrencies has surged quite a lot over the last few years. Facebook is currently also developing its cryptocurrency called Libra. The suspension of Whatsapp within a month of its launch is just another regulatory blow to the social media giant as it has been continuously criticized for its stablecoin project by authorities all around the world.