A few days ago, WhatsApp payments were officially halted in Brazil. Today, the suspension has been lifted by the country’s antitrust watchdog. A very interesting turn of events that raises a lot of questions.
WhatsApp Suspension Explained
Banning a mobile payment method in any country is not something to be taken lightly. When WhatsApp payments were suspended in Brazil, many people were left wondering what was going on exactly. According to the local antitrust watchdog Cade, a partnership between Facebook and Brazilian card operator Cielo was the cause.
Concerns arose over how this partnership would infringe on people’s choice for payments. Additionally, the watchdog expected WhatsApp payments to limit the ability of other companies to properly compete in an ecommerce setting. After all, Cielo has a 41% market share in the country at this time. While the concerns seemed justified, the data was not entirely correct.
Acting on any favoritism concerns is crucial for an antitrust watchdog. Any partnership that can influence a domestic economy needs to be reviewed, and if necessary, scrutinized. Whether that warrants banning a payment method in quick succession, is a different debate altogether.
Reversing the ban Swiftly
It is commendable to see Cade undo this WhatsApp payment ban so quickly. Despite the decision, the investigation into this Facebook-Cielo partnership is far from over. Moreover, this news does nothing to mend the relationship between WhatsApp and Visa or Mastercard.
In the WhatsApp camp, there is a great sigh of relief. Officials confirm that the company is looking forward to letting Brazilian users send money to friends or family and make purchases.
Confirming the popularity of WhatsApp payments in Brazil is its growing user base. Recent statistics confirm the South American country is the second-biggest market for WhatsApp behind India. Over 120 million people in the country use the application on a regular basis. How many of those make payments through the service, was not disclosed at this time.