Messaging app WhatsApp has hit a brick wall in its rapidly expanding service as the Brazil central bank has announced a suspension to its payment service.
This comes as a major setback to setback to Facebook, owners of WhatsApp as Brazil is the second largest market for the messaging service.
Making the announcement in a statement Tuesday, Brazil’s central bank said it was taking the decision to “preserve an adequate competitive environment” in the mobile payments space and to ensure “functioning of a payment system that’s interchangeable, fast, secure, transparent, open and cheap.”
As a result, Banks in Latin America’s biggest economy have asked Mastercard and Visa, who are among the payments partners for WhatsApp in Brazil, to suspend money transfer on WhatsApp app.
Brazil’s central bank added that it hadn’t had the opportunity to analyze WhatsApp’s payment service prior to its rollout.
Two years after Facebook began testing WhatsApp Pay in India – its largest market – it has yet to receive approval to expand operations.
WhatsApp rolled out its mobile payments service in Brazil last week – the first time it had been able to conduct a nation-wide rollout of its payments service in any market. It has also been testing Pay Services in Mexico.
The service enables users to exchange money with one another and also pay businesses.