WhatsApp Pay stopped by the Central Bank of Brazil
WhatsApp Pay stopped by the Central Bank of Brazil

WhatsApp Pay stopped by the Central Bank of Brazil

By Alfredo de Candia - 24 Jun 2020

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In a statement, the Central Bank of Brazil ordered both VISA and MasterCard to suspend all services involving WhatsApp and WhatsApp Pay with immediate effect

The experimental service called WhatsApp Pay, which was to become available in Brazil, was announced just over a week ago.

It is supposed to be a payment service integrated directly into the messaging app to allow users to transfer money and also connect credit or debit cards to the app. 

The testing was mainly motivated by the progress that China has made in this area: such as the famous WeChat that allows managing money through its app.

Why has Brazil stopped WhatsApp Pay

Going into more detail, it is clear that the reason for blocking the project is to preserve an adequate competitive environment that guarantees the operation of an interoperable, fast, secure, transparent, open and cost-effective payment system. 

This halting will allow the Central Bank to assess the risks for the Brazilian payment system (SPB) and ensure that it complies with Law 12.865 of 2013.

A poor assessment of these potential risks could cause damage to competitors and a lack of data confidentiality. Hence it is noted that those who fail to comply with the decision will incur a penalty amounting to BRL 500 thousand (85,000 euros, 97,000 dollars). 

The main concern of the Central Bank of Brazil is that WhatsApp collects user data, especially those related to expenses and transfers, making it possible to learn more about the habits of users, which products or services they buy, how their savings are used and so on.

Let’s not forget that WhatsApp has a really impressive user base: in Brazil alone, there are 120 million users using the app every day, so having access to these people’s data could put WhatsApp in a very advantageous position.

Towards a cashless society 

The topic of digital payments is certainly on the agenda because we are increasingly moving in the direction of a “cashless” society, i.e. without the use of cash, but all managed through applications and debit and credit cards.

In this scenario, blockchain and crypto assets have already shown that they work and offer a greater guarantee in terms of privacy.

PayPal itself could soon open the doors to cryptocurrencies and integrate them into its own application. 

At any rate, WhatsApp Pay’s service in Brazil remains suspended for the time being, and WhatsApp’s top management is already working to provide support to the Central Bank and dispel any doubts or concerns about the use of this system.

Alfredo de Candia

Android developer for over 8 years with a dozen of developed apps, Alfredo at age 21 has climbed Mount Fuji following the saying: "He who climbs Mount Fuji once in his life is a wise man, who climbs him twice is a Crazy". Among his app we find a Japanese database, a spam and virus database, the most complete database on Anime and Manga series birthdays and a shitcoin database. Sunday Miner, Alfredo has a passion for crypto and is a fan of EOS.

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