We recently wrote that the Central Bank of Brazil has banned the new payment function of the popular WhatsApp communication platform. Today, we learn that local regulators have eased restrictions imposed on Facebook, but the use of the new feature is still suspended.
CADE overturned the decision
On June 24, the Brazilian Administrative Council for Economic Defense, known locally under the Portuguese abbreviation “CADE”, suspended the contract between Facebook and the Brazilian payment company Cielo for processing WhatsApp payments.
On 30 June, it annulled the decision, but WhatsApp payments remain suspended as a result of parallel actions taken by the Brazilian Central Bank.
CADE withdrew its sanctions imposed on Facebook and Cielo, after receiving information from companies indicating significant risk reduction.
The companies tried to assure CADE that their contract would not threaten competition in the Brazilian payment sector and documents stwierdzałythat Facebook and WhatsApp will only “offer an additional channel for payment transactions between consumers and traders.”
CADE currently agrees that the partnership of companies “does not translate into a closed payment system”, noting that the contract allows “the possibility of aggregating other entities operating in the chain of payment instruments”.
“There is evidence that the reasons for deciding whether to impose a preventive measure do not exist and therefore need to be revoked.”
– CADE said.
Although an agreement has been reached, CADE will continue its investigation into the partnership, with the regulator emphasizing that any anti-competitive behavior will result in the imposition of sanctions on companies again.
In a statement, Cielo Gustavo Sousa’s chief financial officer wrote that “the company’s operations are under the analysis of the Central Bank of Brazil and that transactions through the WhatsApp application remain suspended.”
The new WhatsApp messenger function is to allow the purchase of items and payment of obligations, directly in the application chat. The function will be free for users. Only sellers will have to pay a small processing fee, as is the case when accepting card payments. For now, Facebook has decided to provide the new feature only in Brazil.