The recently launched payments feature of the leading messaging platform WhatsApp still remains suspended in Brazil, despite native regulators easing restrictions placed on its owner, Facebook.
Earlier on 24th June, Brazil’s Administrative Council for Economic Defense, known locally by its Portuguese acronym ‘CADE’ suspended an agreement between Facebook and Brazilian payment firm ‘Cielo’ to process payments for WhatsApp.
Recently on 30th June, it changed its decision, however WhatsApp payments still remain suspended as a results of parallel action taken by the central bank of Brazil.
Associated Risks Initially Identified By Regulators
CADE changed its sanctions on Facebook and Cielo after receiving information from the firms evidencing a considerable reduction within the risks initially identified by the watchdog.
The firms sought to assure CADE that their deal wouldn’t compromise the competitive landscape of Brazil’s existing payments sector, with the documents asserting that Facebook and WhatsApp will merely “offer a further channel for payments transaction in-between consumers and merchants.”
CADE accepted that the firms’ partnership that it “does not translate a closed payment system” adding that the deal permits “the possibility of aggregating other agents active within the payment instruments chain”.
“There is evidence that the grounds that supported the choice to impose a precautionary measure don’t exist, therefore it’s necessary to revoke [it],” CADE added.
However, despite warming to the deal, CADE will still investigate the collaboration, with the regulator emphasizing that any anti-competitive behavior will end in the reimposition of sanctions against the firms.
New Payment Operation’s Still Remain Under Analysis
Within an announcement, Cielo’s president of finance Gustavo Sousa outlined that the firm’s “operation’s remain under the analysis of the Brazil’s central bank & that the transactions via the WhatsApp app remain suspended”.