{"id":5531,"date":"2020-06-24T11:01:34","date_gmt":"2020-06-24T11:01:34","guid":{"rendered":"https:\/\/newmoneyreview.com\/?p=5531"},"modified":"2020-06-29T21:18:39","modified_gmt":"2020-06-29T21:18:39","slug":"brazil-blocks-facebooks-payments-push","status":"publish","type":"post","link":"https:\/\/newmoneyreview.com\/index.php\/2020\/06\/24\/brazil-blocks-facebooks-payments-push\/","title":{"rendered":"Brazil blocks Facebook\u2019s payments push"},"content":{"rendered":"

Brazil\u2019s central bank has put an apparent stop to Facebook\u2019s payments plans in the country only a week after the tech giant announced the launch of a new WhatsApp-based digital payments service<\/a>.<\/p>\n

Brazil is WhatsApp\u2019s second-largest market by the number of users<\/a>.<\/p>\n

In India, WhatsApp\u2019s largest market, after a trial programme the national financial authorities also prevented the Facebook-owned messaging platform from launching a large-scale payments service<\/a>.<\/p>\n

Facebook has also received rebuffs from global financial regulators over its plans to launch its own digital currency called Libra<\/a>.<\/p>\n

According to Bloomberg<\/a>, when suspending WhatsApp\u2019s payment activities in the country Brazil\u2019s central bank cited the need to \u201cpreserve an adequate competitive environment, that ensures the functioning of a payment system that\u2019s interchangeable, fast, secure, transparent, open and cheap\u201d.<\/p>\n

The central bank also ordered Mastercard and Visa, on whose payment \u2018rails\u2019<\/a> the WhatsApp service was to run, to stop payment and money transfer activities through the app.<\/p>\n

Card payments dominate online commerce in Brazil: according to JP Morgan, cards are used in 59 percent of online transactions<\/a>.<\/p>\n

Consultant McKinsey says Brazil is the region\u2019s largest payments market<\/a>, with nearly 40 percent of Latin America\u2019s payments revenue growth coming from card-related fee income.<\/p>\n

The Brazilian central bank\u2019s citing of competition concerns as a reason to block Facebook\u2019s payments launch may be seen as controversial.<\/p>\n

According to the Bank for International Settlements (BIS), which has published a special chapter on payments<\/a> as part of its annual economic report, payment processing fees in Latin America are higher than in many other global regions.<\/p>\n

\u201cCard payments are a lucrative source of revenue for financial institutions and card networks. Both features reflect the fact that these institutions use payments as a competitive moat,\u201d the BIS said.<\/p>\n

\u201cOverall, the ratio of domestic payment revenues to GDP (a rough proxy for costs) is higher where banks\u2019 net interest margins are higher, pointing to lack of competition. In Latin America, for example, credit card fees amount to over 1 percent of GDP,\u201d the BIS said.<\/p>\n

\u201cThis indicates the potential for reducing costs without weighing on economic activity,\u201d the BIS said.<\/p>\n

According to Bloomberg, a spokesperson for WhatsApp reiterated Facebook\u2019s determination to enter the payments market in Brazil.<\/p>\n

\u201cOur goal is to provide digital payments to all WhatsApp users in Brazil using an open model and we will continue to work with local partners and the central bank to make this possible,\u201d the spokesperson said.<\/p>\n

Sign up here<\/a> for our monthly newsletter<\/em><\/p>\n

Click here<\/a> for a full list of episodes of the New Money Review podcast: the future of money in 30 minutes<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Brazil\u2019s central bank has put an apparent stop to Facebook\u2019s payments plans in the country only a week after the tech giant announced the launch of a new WhatsApp-based digital […]<\/p>\n","protected":false},"author":4,"featured_media":5530,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1053,1014],"tags":[1085,1775,1055,1784,1388],"class_list":{"0":"post-5531","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-featured-1","8":"category-payment","9":"tag-bis","10":"tag-brazil","11":"tag-facebook","12":"tag-mckinsey","13":"tag-whatsapp"},"yoast_head":"\nBrazil blocks Facebook\u2019s payments push - New Money Review<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/newmoneyreview.com\/index.php\/2020\/06\/24\/brazil-blocks-facebooks-payments-push\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Brazil blocks Facebook\u2019s payments push - 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