WhatsApp Payments Has Landed in Brazil

Without trying to cast any aspersions on anyone’s Facebook page, as we’re sure you’re doing an excellent job with your memes and photos, we believe that the most interesting profile on Facebook is…Facebook’s. When the news dropped this past Monday about WhatsApp bringing payments for people and small businesses in Brazil, we were impressed but not surprised. Facebook has managed to make the extraordinary look ordinary throughout the course of its life with some big and mostly successful headlines, so making a transition in the payments world is something we could have seen coming. 

The big question underlying this move is whether WhatsApp Payments will be a successful endeavor. Before analyzing the chances of that happening, let’s have a look at some of Facebook’s most notable business moments in history. 

A Meteoric Rise & Problems in Paradise

The brainchild of Mark Zuckerberg has come a long way from being a promising Harvard social network project back in 2004. Apart from revolutionizing the way we communicate and alter the meaning of words such as scroll, like, post and wall, the company has recorded some mindblowing milestones along the way. 

Let’s take the company’s IPO for example. Held on Friday, May 18, 2012, the IPO was the biggest tech IPO (at the time) in history with a peak market capitalization of over $104 billion. If Facebook’s notoriety and prominence weren’t enough, Facebook bought Instagram in 2012 before its IPO for $1bn (£760m), and WhatsApp in 2014 for $19bn.

Whilst most of the way has been a rosebed of success, Facebook has had its fair share of road bumps. First, it was the GDPR scandal and controversy and then the lukewarm launch and progress of its own cryptocurrency, Libra. Whilst the launch of WhatsApp payments is big, we can’t help but wonder if it’s going to have the same fate as Libra. The comparisons are inevitable but the different vertical does allow room for optimism. 

A Breakdown of WhatsApp Payments

• People and companies in Brazil can now send and receive money without any commission fee through the messaging app, using Facebook Pay.

• Businesses will have to pay a 3.99% processing fee to receive payments using a six-digit PIN or fingerprint to complete transactions.

• You use it by linking up your WhatsApp account to your Visa or Mastercard credit or debit card, with initial local partners including Banco do Brasil, Nubank, and Sicredi.

• Powered by Visa Direct technology and Visa Cloud Tokenization, payments on WhatsApp are as easy and secure as sending a message. In a statement released by Visa, Jack Forestell, Chief Product Officer said the following: “As digital becomes the epicenter of daily life during the global pandemic, being able to move money in real-time is increasingly critical for consumers and businesses. Using our technology to open up avenues like WhatsApp for more people to shop and pay each other digitally is an incredibly powerful proposition that we’re excited to bring to life.” 

• Facebook was gearing up for this move for a couple of years now when they launched WhatsApp Business, a “… the WhatsApp version of a Facebook Page.” This new iteration of the feature does not only allow people to chat about a product, or even send payment details, but actually transact.

• One would think that since WhatsApp’s biggest market is India with 400+ million users, that would be the country the first country to use WhatsApp Payments. Unfortunately, the regulatory challenges attached to the market forced Facebook to look at the second-best option, Brazil. 

• At this point in time, there are no clear indications as to the next market/territory WhatsApp Payments will be available at. Brazil is a great case study for the company but if project Libra and the beta testing in India have taught us anything is that these things take time, patience, and a lot of adjustments to fit each specific industry. 

Recap

Facebook has a history of bold moves and revolutionary technologies. Whether Facebook Pay will be a successful endeavor remains to be seen, even though the level of success does not take away from the significance of this move. What Facebook is essentially doing, is opening the door to the era of payment-messaging. The worlds of eCommerce and messaging are about to become one and that’s definitely a new, challenging paradigm.