Second largest market for Whatsapp, Brazil, has suspended the newly unveiled WhatsApp payment service barely a week after its rolling out.
Through a statement, Brazil’s Central Bank said it is taking the decision to “preserve an adequate competitive environment” in the mobile payments space.
The bank said that the suspension would further provide a stage to assess possible risks of the payment system to the country’s infrastructure.
The Central Bank in Brazil has also asked Mastercard and Visa to suspend money transfer to the WhatsApp feature, failure to which would lead to administrative sanctions and fines.
The bank further suggested that it had not been given an opportunity to analyze WhatsApp’s payment service before its rollout for public use.
Tuesday’s suspension s the latest setback to Facebook-owned WhatsApp after a flop in the testing of WhatsApp Pay in India by failure to gain regulatory approval.
WhatsApp is also testing Pay in Mexico.
According to TechCrunch, a WhatsApp spokesperson has said discussions are underway to convince the Central Bank to allow Pay’s open model.
WhatsApp rolled out its payment model WhatsApp Pay in Brazil last week, being the first nationwide rollout of a feature in a whole nationwide market.
The Facebook-owned service enables users to send money and pay for services at no extra cost (at the time of launch).
Businesses receiving the payments were however parting with a 3.99% processing fee.
It is not yet clear if the Central Bank’s notice has been adhered to by WhatsApp, Visa and Mastercard.