WhatsApp’s Payment Service debuts in Brazil

WhatsApp today has announced that it is rolling out payments in its app. The Facebook-owned messaging service is rolling out the payment service first to its users in Brazil. Users from the South American country will be the first to be able to send and receive money by way of its messaging app using Facebook Pay, the payment service Facebook launched last year.

WhatsApp via a blog post disclosed that the payment service is free for consumers to use but businesses will pay a processing fee to receive payments and will work by the way of six-digit PIN or fingerprint to complete transactions.

To get started, users will be required to link up their Whatsapp accounts to their Visa or Mastercard credit or debit card, with initial local partners including Banco do Brasil, Nubank, and Sicredi. Cielo, a payments processor, is also working with WhatsApp to complete transactions. “We have built an open model to welcome more partners in the future,” it noted.

The news comes as a bit of shock as the company has been testing its payment service among users in India, and many had thought that the world’s second-largest internet market would be the debut region for the service.

The move to leave India out, for now, may owe largely to the regulatory quagmire Facebook has found itself. An issue that prevented it from expanding the payments service beyond a small, limited launch, in what is otherwise its biggest market.

It would have been a big win for Facebook though there are several other digital payments services India, including Google Pay and Paytm’s service, yet there are no clear, large, and popular competitors offering payments within a messaging app in the country.

From the onset, users had adopted Whatsapp informally for commercial purposes as small business owners have used it to exchange messages with users around the sale of goods, what is in stock and so on. But under the wing of Facebook which acquired the company in 2014 for $19 billion, WhatsApp started in earnest the big task of bringing in a more formal set of business services.

This gave birth to the launch of WhatsApp Business, which lets SMBs post catalogs and stock links within the app; advertisers on Facebook also can create links through to their WhatsApp accounts.

But now with payments, WhatsApp, which has amassed over 2 billion users, is finally taking a more comprehensive commercial plunge, giving people not just a place to chat about a product, or even send payment details, but now to transact.

The company said, “Payments on WhatsApp are beginning to roll out to people across Brazil beginning today and we look forward to bringing it to everyone as we go forward.”

Users in Brazil will be able to use the payments service on WhatsApp to make purchases from local businesses without leaving their chat, the Facebook-owned service said.

“The over 10 million small and micro-businesses are the heartbeat of Brazil’s communities. It’s become second nature to send a zap to a business to get questions answered. Now in addition to viewing a store’s catalog, customers will be able to send payments for products as well,” the company wrote in a blog post.

As for subsequent regions for launching the service, it’s not clear whether Facebook will be open to working with other kinds of payment methods, or even other payment rails beyond Facebook Pay, or what kinds of use cases it will pursue for the service although the trial in India, using UPI, implies that it won’t just be a one-size-fits-all approach.