WhatsApp has announced that it is bringing digital payments to its users in Brazil. Brazil will be the first market where people will to be able to send and receive money via the messaging app using Facebook Pay, the payments service WhatsApp owner Facebook launched last year.
This news comes as bit of a surprise. WhatsApp had been testing its payments service among users in India for months (albeit using a different system), so many observers assumed that this vast market would host the service’s debut.
However, that hasn’t happened, and some analysts have hinted that, despite the attraction of the Indian market’s size, the evident popularity of WhatsApp and the existence in India of a number of digital payments services, including Google Pay and Paytm, the slow-moving Indian regulatory process put WhatsApp off.
Thus it’s Brazilian users who will be able to send money securely or make a purchase from a local business without leaving their chat. Sending money or making a purchase on WhatsApp will be free for people but businesses will pay a processing fee to receive customer payments. A special six-digit PIN or fingerprint will be required to prevent unauthorized transactions.
To begin with, the service will support debit or credit cards from Banco do Brasil, Nubank and Sicredi on the Visa and Mastercard networks. WhatsApp is working with payments processor Cielo, whose shares soared on the news. WhatsApp claims it has built an open model “to welcome more partners in the future”.
This initiative is part of a drive by WhatsApp to build a revenue stream that goes beyond ads and end user data. And Brazil may not be India in terms of population but it’s certainly big; WhatsApp has over 120 million individual users in Brazil, its second-largest market behind India.
However, the model may need to extend beyond credit cards and bank accounts to truly make the most of this market. On the other hand, if Facebook pushes ahead with plans to bring more e-commerce to its platforms, that sort of expanded offering probably won’t be far off.