WhatsApp Pay, which has been waiting for regulatory approval for a full launch in India for a long time, launched it in Brazil earlier this week, only to be swiftly shut down.

Facebook says its committed to launch WhatsApp Pay in India after being shut in Brazil
Atom Payments Thursday, June 25, 2020 - 13:53

WhatsApp Pay, which has been waiting for regulatory approval for a full launch in India for a long time, launched it in Brazil earlier this week, only to be swiftly shut down. However, a company spokesperson said that they are committed to launching WhatsApp Pay in India.

“Even as we continue to work with our local partners and the central bank in Brazil, we remain committed to launching WhatsApp Payments in India. UPI is a lighthouse model for the rest of the world, with local banks and institutions driving innovation on a local stack that is capable of delivering financial services for all,” a WhatsApp spokesperson told the Times of India.

Facebook has been testing WhatsApp Pay in India since 2018, but has been met with multiple roadblocks including data compliance issues and regulatory hurdles.

On June 15, Facebook CEO Mark Zuckerberg on Monday announced that they were launching digital payments for people using WhatsApp in Brazil, where the users would be able to send and receive money to family and friends and make purchases.

The Brazil launch comes ahead of India where the company began testing payments feature way back in 2018 but could not launch the feature for over 400 million users owing to regulatory roadblocks and data compliance issues. This made Brazil the first country where they widely rolled out payments in WhatsApp, which is the app’s second biggest market after India.

In Brazil, Facebook said it was building Facebook Pay by working with local banks, including Banco do Brasil, Nubank, Sicredi and Cielo, a payments processor for merchants.

Sending money or making a purchase on WhatsApp is free for people. Businesses will pay a processing fee to receive customer payments, similar to what they may already pay when accepting a credit card transaction.

Zuckerberg said earlier this year that the peer-to-peer, UPI-based payments feature will be rolled out in several countries.

"We got approval to test this with one million people in India back in 2018. And when so many of the people kept using it week after week, we knew it was going to be big when we get to launch," Zuckerberg said in January.

It was soon suspended by Brazil’s antitrust body and Central Bank. The Central Bank in a statement said that ’s its motivation for the decision “is to preserve an adequate competitive environment, which ensures the functioning of a payment system that is interchangeable, fast, secure, transparent, open and cheap”.

The anti-trust regulator said it was suspending WhatsApp’s partnership with Cielo. Bloomberg, which reported the news, said that as per the statement, WhatsApp’s user database combined with Cielo’s market share could make the barrier for any competitor too high, and those concerns needed to be addressed.

WhatsApp also wanted small businesses to be able to receive payments from customers, for which they would simply need to create a WhatsApp Business app account.

This comes as Jio Platforms and Reliance Retail have entered into a commercial partnership with WhatsApp, which hints towards the group’s ‘new commerce’ move finally being set in motion. There are plans to integrate WhatsApp and JioMart.

Last week, WhatsApp informed the Supreme Court that it has fully complied with data localisation norms. “An independent third-party auditor, certified by CERT-in (the government agency under the IT ministry), has confirmed that WhatsApp’s payments feature satisfies the data localisation requirements under the RBI circular and frequently asked questions (FAQs),” WhatsApp reportedly said. 

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