Meta’s long-awaited plan to allow users to send money to businesses via messaging app WhatsApp in Brazil has been hit by clashes with potential payments partners, marking the latest blow to the tech giant’s sprawling ecommerce ambitions.
WhatsApp had aimed to launch a payments-to-merchant (p2m) function in Latin America’s most populous country late last year, according to several people familiar with the project, in what would have been a world-first for the encrypted messaging app.
However, WhatsApp has struggled to sign up local “merchant acquirers” — companies that process electronic payments and are needed to launch and run the service — and is still awaiting approval from the central bank in the country, its second-largest market with 120mn users.
The difficulties in launching the initiative marked another setback for Meta’s push into financial services.
The Brazilian move was planned as a test bed as the social media group seeks to facilitate more ecommerce on its platforms globally. Meta is seeking alternative revenue streams as popularity falls for its main products such as Facebook and Instagram — a trend that threatens its $118bn-a-year ad-based business model.
Negotiations between Meta and payments groups have stalled over several issues, including proposed fees from WhatsApp that acquirers felt were too low, according to people familiar with the talks.
Merchant acquirers also found the terms drawn up by Meta were onerous and had concerns the Silicon Valley group wanted to pass on certain legal responsibilities associated with the initiative to them, the people said.
“The problem isn’t technical,” said one person aware of the discussions and who asked not to be named. “It’s contractual. The infrastructure is all ready.”
The country’s dominant acquirers — Cielo, Rede and Getnet — declined to comment.
WhatsApp said it did “not consider the launch of person-to-merchant payments in Brazil to be delayed”, adding: “We continue to work collaboratively with local authorities and potential partners, and don’t comment on the specifics of confidential regulatory or commercial discussions.”
Facilitating ecommerce and payments would allow Meta to tap fresh revenue streams and gather data to increase the value of its existing advertising, chief executive Mark Zuckerberg has said.
However, Meta’s payments efforts to date have been plagued by difficulties. This year, Meta’s global cryptocurrency project was wound down after US regulators refused to give the pilot the green light over monetary stability and competition concerns.
While WhatsApp has already rolled out a feature in Brazil and India enabling money transfers between individuals, known as peer-to-peer (p2p) payments, both efforts were initially delayed by regulatory pushback.
Days after WhatsApp launched p2p in Brazil in mid-2020, the central bank blocked the service, citing concerns about competition, efficiency and data privacy. WhatsApp relaunched the feature a year later.
WhatsApp needs acquirers on board before the central bank will decide whether to approve the p2m service, according to one person familiar with the situation. The central bank has stipulated that WhatsApp partner with multiple acquirers rather than just one following competition concerns, another person said.
The regulator has also expressed concerns about whether there would be clear recourse for the country’s smaller merchants to make a claim against Meta should any issues arise with payments, the person said.
Some within Brazil’s payment sector believe the central bank wants to boost the adoption of its own instant payment system, called Pix, which enables transfers between transactional accounts in a few seconds. It has surged in popularity since being launched in November 2020.
Brazil’s central bank said: “The Central Bank does not comment on the progress of discussions with interested parties during authorisation processes”.
Meta suffers setback with WhatsApp business payments in Brazil & More Brazil Latest News Update
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