- Brazilian financial firms such as Banco do Brasil, Nubank, Sicredi and Cielo are partnering up with Facebook to use the platform;
- More than 120 million Brazilians use WhatsApp on their cell phones, and 98% of this audience is made up of users who access the app at least once a day;
- The coronavirus pandemic has accelerated the adoption of WhatsApp as a trade platform in Brazil.
Mark Zuckerberg, CEO of Facebook, announced this Monday that WhatsApp Pay is being launched in Brazil. The system, which was being tested in India, allows people to send and receive money using the messaging app. Small businesses should also make sales easily within WhatsApp.
Brazil is the first country where Facebook is widely rolling out payments in WhatsApp. The feature uses Facebook Pay, the payments service WhatsApp owner Facebook launched last year, and which provides a way to make payments across the company’s apps.
The new feature will be made available gradually to Brazilian users in the coming weeks.
Zuckerberg also said that Facebook is partnering up with local banks, including Banco do Brasil, Nubank, Sicredi as well as Cielo, the leading payments processor for merchants in Brazil.
Transactions will be made using Mastercard and Visa debit or credit cards issued by partner financial institutions, and payments will be processed by Cielo at no cost for consumers or individuals making money transfers – merchants will have to pay a fee.
How WhatsApp Pay will work
Companies will be able to access the feature through WhatsApp Business. A new registration or a Cielo account on Facebook Pay will be needed, with updated information such as CNPJ (the Brazilian National Register Number for Legal Entities), address and bank account. Application will take up to three days before being approved or not.
Companies won’t need to have an account at one of the partner banks to receive payments. Each transaction will have a 3.99% fee and the money will be transferred within two business days. There is no limit on such transactions.
Customers who want to pay using WhatsApp must have a card issued by one of the partner institutions. Credit and debit cards will be accepted at no extra cost to the consumer.
For cash transfers between individuals, both parts will need an account with a corresponding debit card at accredited banks. Transactions will be done at no cost on the same day (or on the next business day, if transactions take place after a certain time).
It will be possible to transfer up to BRL 1,000 per transaction and receive up to 20 transactions per day, but there is a monthly limit of BRL 5,000. In terms of security, WhatsApp said card details are encrypted per the PCI standard and users are required to use either a Facebook Pay PIN or fingerprint to authorize each payment.
The Pay feature was being tested in India, where WhatsApp is also widely used
WhatsApp’s payments and money-transfer feature was being tested in India for some months, and Mark Zuckerberg had stated in January that the technology would be available first to users in countries where the messaging app has a strong presence, like Brazil and Mexico.
Seeking to surf the wave of digital payments transformation in emerging markets, Facebook’s choice for these countries is hardly a mere coincidence: besides being leaders in WhatsApp usage, those are places with plenty of room for growth when it comes to digital payments, due to a large unbanked population and inefficiency of traditional institutions.
Nilton Kleina, a journalist focusing on technology, wrote for LABS that the payments feature was always an obvious path to monetize the messaging platform, which, unlike Facebook’s main flag social network and Instagram, does not benefit from advertising : “The upcoming service will not only modify the company’s business model, but mainly open up new market horizons and in many regions.”
The pandemic accelerated the adoption of WhatsApp as a trade platform in Brazil
The coronavirus pandemic has accelerated the adoption of WhatsApp as a trade platform in Brazil. With physical stores closed during the quarantine period, many sellers saw the app as a way to keep in touch with customers and continue their business. A survey by the Aivo customer service solutions with 130 companies shows that conversations between users and companies on Whatsapp grew 516% between February and April.
The platform has become a key tool for small, medium and large companies alike. Via Varejo, owner of Brazilian retail chains Casas Bahia and Ponto Frio, provided the app for more than 7,000 salespeople and saw its e-commerce revenue skyrocket. Ri Happy, the largest Brazilian retailer specialized in toys, was basically absent from the web before the pandemic, but now takes orders by WhatsApp messages.
Embedded within the company’s payment ecosystem, Facebook Pay, the service will allow users to pay for something on any of Facebook’s apps, without needing to enter their credit card details more than once, using it across the suite.
Brazil is one of the main markets for WhatsApp worldwide
Facebook has been lately looking for an executive to fill a job vacancy for WhatsApp’s Head of Brazil. Outside the United States, only India has a similar position, which indicates how important Brazil is for the messaging service future.
More than 120 million Brazilians use WhatsApp on their cell phones, and 98% of this audience is made up of users who access the app at least once a day. The app has approximately 2 billion users worldwide.
In February, WhatsApp has chosen Brazil to launch its first ever brand campaign in the world. The timing and the theme of the campaign’s first film were also revealing of the importance of Brazilan market to the Facebook-owned messaging app: Carnival season.
“Brazil is one of the main markets for the company worldwide, so we decided to launch the campaign here and pay tribute to the solidarity of Brazilians inspired by one of the country’s dearest traditions,” Taciana Lopes, Head of Consumer Marketing at Facebook Brazil, declared at that time.