Brazil blocks payments via Whatsapp

Stop the new payment function a few days after launch. The Central Bank wants to see us clearly on the use of personal data

(Photo: Inc42) A little over a week after the launch of the payment service via WhatsApp, Brazil decides to suspend its use. Bad setback for the Menlo Park functionality test.

Tech Crunch explains that the reasons presented by the Carioca central bank indicate that the service has been suspended in order to be able to "preserve an adequate competitive environment" in the world of mobile payments in order to guarantee "the functioning of an interchangeable, fast, secure, transparent, open and cheap payment system".

This stop will allow the central bank to assess the risks for the Brazilian payment and to check if WhatsApp Pay complies with a 2013 law regulating digital payments.

Another concern of the Carioca central bank concerns the processing of user data. The fear is that Menlo Park may get hold of the precious personal data, in particular those related to the transfer of money and expenses. These data would allow to further deepen the knowledge of users' habits. However, WhatsApp has repeatedly pointed out that end-to-end encryption protects its chats, and consequently also payments.

After the announcement, the Brazilian banks imposed payment partners on WhatsApp, Visa and Mastercard, to suspend all money transfers through the Facebook family's instant messaging application, threatening fines and administrative penalties if the order is not executed.

the decision of The brazilian central bank came after the institution has had the opportunity to analyze the functioning of the service . From Menlo Park to a spokesman for WhatsApp has explained that the objective of the service is to use a model that is open and that the company will continue to work with the central bank and local partners to unlock the situaizone.

Although WhatsApp Pay is in the test phase for more than two years in India, Facebook was betting on landing in Brazil. For customers of the money transfer is free, while companies pay a fee of 3,99% on the amount .