Starting In Brazil, WhatsApp Launches Payment Service Using Facebook Pay

WhatsApp payment service starts in Brazil

After months of talks and trials, WhatsApp finally introduces a way for users to send and receive money through its app.

Starting for users in Brazil, users can transact their money using Facebook Pay, the payments service WhatsApp owner Facebook launched in 2019.

To begin with, Brazilian users can link their Visa and Mastercard debit and credit cards from Banco do Brasil, Nubank, and Sicredi, with processing from Cielo.

And to authorize a transaction securely, users need to then confirm it using a six-digit PIN or fingerprint.

The feature is free for consumers to use, but comes with a 3.99% processing fee for businesses receiving payments.

The news comes with a bit of a surprise, knowing that WhatsApp had been testing its payments service among users in India for months, using another system, and not Facebook Pay.

Many assumed that India would be the debut region for the service. What made Facebook to hold back was because the social giant remains stuck in India's regulations that prevented it from expanding the payments service beyond a small, limited launch.

According to WhatsApp in a blog post:

"The over 10 million small and micro businesses are the heartbeat of Brazil’s communities. It’s become second nature to send a zap to a business to get questions answered. Now in addition to viewing a store’s catalog, customers will be able to send payments for products as well. Making payments simple can help bring more businesses into the digital economy, opening up new opportunities for growth."

"In addition, we’re making sending money to loved ones as easy as sending a message, which could not be more important as people are physically distant from one another. "

WhatApp has been approaching business entities for a long time. With WhatsApp Business for example, business owners can exchange messages with users to talk about sale of goods, what's in stock and so forth.

Under the umbrella of Facebook, which acquired it for a staggering $19 billion, WhatsApp has helped its parent company to lure in more business entities towards its services.

The messaging app has in theory been working on payments for years. But there were a lot of delays in part due to how and where Facebook wanted WhatsApp to implement it.

And with the payment feature finally here, WhatsApp which has more than 2 billion users, is finally taking a more comprehensive and formal commercial plunge, giving users not just a place to chat about a product, or even send payment details, but to finally allow them to transact.

In turn, WhatsApp can finally give Facebook the revenue stream it always wanted.

What's more, the mobile payments should help push Facebook to expand its sources of revenue beyond advertising.

"Small businesses are the backbone of the country. The ability to easily make sales right within WhatsApp will help business owners adapt to the digital economy, support growth, and financial recovery," said Matt Idema, WhatsApp’s Chief Operating Officer, said in a statement.

What should be noted here is that, there are other kinds of transactions such as remittances - where people transfer money to friends, family and businesses that are often far away - are some of the more popular uses of phones beyond simple calls and texts.

This is especially true in emerging regions.

This can be a problem for WhatsApp, considering that payment cards, or even bank accounts, are yet to be the norm in every market around the world.

At the launch of this WhatsApp payment feature, the company has yet to explain whether or not it will be working with some other payment methods, or even with other payment rails beyond Facebook Pay.

A WhatsApp spokesperson also declined to say more when asked for more specific details about future plans beyond Facebook CEO Mark Zuckerberg’s “More to come soon!” statement.

“We’re continuing to roll out Facebook Pay on Facebook to more countries outside the U.S. for existing payment experiences, which vary by country and may include experiences such as in-game purchases and fundraisers where already available,” a Facebook spokesperson said.

“As we’ve said previously, our goal is to bring Facebook Pay to more people and places over time.”

“Payments on WhatsApp are beginning to roll out to people across Brazil beginning today and we look forward to bringing it to everyone as we go forward,” the company said.

Published: 
16/06/2020