About a month back, WhatsApp introduced a payment system in Brazil to help facilitate the flow of money in the country. Unfortunately, this did not last for long as the Central Bank of Brazil has suspended this payment system.
This was reported by the bank on Tuesday 30th July, 2020. Cielo, who are the partners of the WhatsApp electronic payment system, is as of now off guard as everything has been suspended. It was a bold move by the two organizations (Cielo and WhatsApp), but has been stopped by the national bank.
In any case, both WhatsApp and Cielo are asking the Brazilian financial authorities to reexamine its striking decision, which depended on the antitrust controller’s (Cade) evaluation that the new system would encourage the convergence of the installments advertise under the control of WhatsApp, the fundamental Facebook messaging platform and Cielo, which controls 40% of the transactions in the country, with more than 1.2 million dynamic clients.
The Central Bank of Brazil was actually looking out for more information from the organizations involved three days after they released Facebook Pay, as the new system was named, on June 15.
The entire thought was to allow clients, consumers and private companies to make financial transactions at a lower cost.
Cielo’s partnership with Whatsapp was to reinforce its delicate market initiative and choke its Brazilian rivals whose progressively forceful techniques caused an unexpected net benefit shrinkage in 2019.
According to an estimate by Cade, if 10% of the Brazilian WhatsApp’s users picked Facebook Pay as their new payment system, Cielo would have new 140,000 new transactions every year more than it encourages today.
The organization would also have new tasks plus an expansion.
Cade also raised worries that Facebook Pay would contort the financial market given that Cielo is co-claimed by the state’s Banco do Brasil and the private bank Bradesco, both huge credit card issuers in the country.
The utilization of Facebook Pay would be permitted distinctly for WhatsApp users that have credit cards—Visa and Mastercard—gave by these two organizations.
More concerns were raised as the activity was propelled without the endorsement of the Central Bank and Cade.
All things considered, the firm have stayed quiet on the Central Bank’s decision.