KARACHI: Following a setback in Brazil last year, WhatsApp has announced that it will once again carry out its peer-to-peer money transfer feature.
WhatsApp introduced its digital payments and funds transfer function in Brazil in June 2020, allowing users to send money to friends and family, but the country’s central bank warned that it might damage the country’s existing payments system in terms of competition, quality, and data privacy.
According to Brazil’s central bank, the service had also failed to obtain the necessary licences, and as a result, the function was disabled. However, according to Reuters, the Facebook-owned app has received approval for in-app money transfers.
Although users can send money to friends and family via the Visa Inc. and Mastercard networks, WhatsApp has been refused permission to allow users to make commercial payments. Both card networks were also forced to acquire new licences in order to operate with Facebook’s messaging app, which would be controlled by the central bank.
The company said the feature would be rolled out to other countries after it was first introduced in Brazil, with a company spokesperson telling Engadget that it was “making the final preparations to make payments on WhatsApp available in Brazil as soon as possible.”
WhatsApp said the decision to “approve our payments initiator licence request” was a “welcome” step in a statement to CNET.
“Now, more than ever, safe, stable, and easy digital payments provide a critical way to distribute money quickly to people in need and aid businesses in their economic recovery,” the report continued.
Facebook, a fast-growing social media behemoth that also owns Instagram, has been eyeing the use of its social media sites to compete with banks and fintechs in enabling fast electronic funds transfers.
Surprisingly, the Brazilian central bank received regulatory approval only months after launching its own instant payment system, Pix, which has since gained widespread adoption.
WhatsApp launched its digital payments feature in India in November, enabling users to transfer money or share costs “without having to exchange cash in person or go to a local bank,” and moving it closer to the status of a “mega app” through its ongoing efforts.
“This safe payments experience makes transferring money as simple as sending a tweet,” it had said, with Forbes calling the feature “groundbreaking” and a “true game-changer” for its target market of India.
WhatsApp first experimented with the concept of a digital payment service in 2018, when it tested the feature with a select group of users. A similar feature is also available on Apple Inc devices, but it is limited to iOS and does not function on Android.
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