Brazil’s central bank shuts down WhatsApp payments

In an embarrassing gut punch to Facebook, from the Brazilian central bank Tuesday suspended WhatsApp payments barely a week after the service launched in the country. The regulator said rolling out the payments service without prior analysis could damage the payments system from a competition, efficiency and data privacy point of view. The same day, the country’s antitrust watchdog blocked WhatsApp’s partnership with payments processor Cielo, which would process payments for Brazil’s 120 million WhatsApp users.

Why should we care?
WhatsApp has 2 billion users globally, and the shutdown of WhatsApp payments in Brazil is the latest blow to Facebook’s global payments ambitions after Libra. Facebook reportedly did not seek approval from Brazilian central bank to launch WhatsApp payments. According to open banking rules Brazil rolled out in May, banks, payment institutions and others licensed by the central bank can share transactional data from individuals or legal entities. The fact that Facebook chose to go outside of that process is problematic. The regulator also likely wants to avoid a closed loop, exclusive relationship between WhatsApp and the country’s largest payments processor, Cielo.