Facebook gets a Libra reception on WhatsApp Pay in Brazil after a nationwide launch a few days ago. Libra is the dead or dying blockchain-based payment system that Facebook Inc wanted to use to rule over its 4 billion inhabitants. Many central banks rightfully pushed back, forcefully, and froze the mission. Then, Facebook went on the flanks, opening WhatsApp Pay which could also grow as a mutated Libra. But its first nationwide voyage is having a push back in Brazil. Yes, Brazil has suspended WhatsApp Pay.
Brazil, the second largest market for WhatsApp, has suspended the instant messaging app’s mobile payments service in the country a week after its rollout in what is the latest setback for Facebook.
In a statement, Brazil’s central bank said it was taking the decision to “preserve an adequate competitive environment” in the mobile payments space and to ensure “functioning of a payment system that’s interchangeable, fast, secure, transparent, open and cheap.”
Banks in the nation have asked Mastercard and Visa, which are among the payments partners for WhatsApp in Brazil, to suspend money transfer on the WhatsApp app. Failure to comply with the order would subject the payments companies to fines and administrative sanctions.
Facebook plans to use payment as a double play since it has the demand. As we can see, the future of advertisement may not be what it has envisaged. Google in January devalued its ad rate currency, making publishers to double traffic for the same money they earned in December. That decision did not come out of strength; it happened because disintermediation is coming from all flanks.
Yes, Amazon offers the best value for merchants as only those visiting Amazon to shop see the adverts. The implication is there: get your products before those on Amazon, and your conversion ratio would be better than showing ads via Google to college students doing research with no intention to buy anything.
So, for Facebook, a future of collecting “rents” on payment transactions is one that secures its castle. Unfortunately, central banks know what an asymmetric warfare is, and are very skeptical. Yet, WhatsApp Pay is here to stay because customers really like WhatsApp; one way or the other, they will get to use it.