WhatsApp’s new payment service allowing users to pay for goods in-app has been suspended just over a week after launching in Brazil.
WhatsApp Pay launched in Brazil, one of the app’s largest markets and the first to test the new functionality, last Monday with the promise of bringing “more businesses into the digital economy”.
Just over a week later Brazil’s central bank has ordered Visa and Mastercard to suspend all payments through the app under threat of significant fines, bringing the service to a standstill.
Despite already being rolled out nationwide, the bank said that launching the service without previous analysis by its monetary authority could pose competition, efficiency and data privacy threats in the country.
Prior to its suspension the bank said it would require any businesses using the service to receive approval for the monetary authority.
WhatsApp reportedly launched without seeking approval from the bank, assuming its blessing was not necessary as it was essentially an intermediary between consumers and financial institutions.
Eleven Financial’s head of equities Carlos Daltozo told Reuters: “It is a bit odd that the central bank decided to suspend WhatsApp as the regulator is already able to oversee all market participants which joined WhatsApp.
WhatsApp said that it is continuing to work with both local partners and the central banks to provide payments its digital payments service.
This comes as the financial regulator is on the cusp of releasing its own digital payments system Pix across Brazil, making the authority both a regulator and direct competition.
WhatsApp said it was committed to integrating this service into its own system.
Its not clear when WhatsApp pay will be rolled out to other markets, or whether this setback could deter it from doing so.