How is money transferred via WhatsApp?

WhatsApp payments are now available in Brazil again, as the Facebook-owned chat service has relaunched the feature nearly a year after it was first launched in the country.

Facebook CEO Mark Zuckerberg said in a video that WhatsApp has relaunched its interpersonal money transfer services in Brazil, after the central bank banned it nearly a year ago.

Brazil was the second platform to launch WhatsApp payments after it was launched in India a few months later, but its central bank forced the service to suspend the feature in June of 2020, a few days after its launch there, according to the Arab portal for technical news.

In March, Brazil's central bank paved the way for the service to allow money to be sent using the Visa and MasterCard networks, after considering whether it met all the rules regarding competition, efficiency and data privacy.

This came after the central bank said that WhatsApp payments could harm Brazil's existing payment system in terms of competition, efficiency and data privacy, adding that it had failed to obtain the required licenses.

WhatsApp initially tried to avoid becoming a financial services company in Brazil and sought licenses by relying on existing bank licenses for Visa and MasterCard, but succumbed to regulatory pressure.

Central bank supervision

The monetary authority also requested that the tech giant be named as a financial services company in Brazil, prompting Facebook to create a new unit called Facebook Pagamentos do Brasil, which is now subject to regulation from the central bank.

Although the feature has been re-launched in Brazil, it will not be available to everyone from the start.

It can be accessed by a limited number of users initially, and they have the ability to invite other people to use the feature.

WhatsApp's 120 million users in Brazil can send each other up to 5000 Brazilian reais ($918) a month for free.

Furthermore, a single transaction has a limit of R$1000 ($184), and users cannot process more than 20 transfers per day.

Merchant Payments

WhatsApp can only process peer-to-peer transfers for now, but it originally introduced the feature to help smaller merchants.

Local businesses in Brazil and India are using the chat app as their primary online presence, and the payment feature was supposed to help them accept digital payments with ease.

Facebook is still in talks with the central bank about merchant payments, and the company reportedly expects to launch the feature sometime this year, adding a new line of revenue to WhatsApp.

Total card payments last year in Brazil amounted to 2 trillion reais ($368.12 billion), an increase of 8.2 percent from 2019.