WhatsApp, which was acquired by Facebook in 2014, yesterday announced a new payments service dubbed “WhatsApp Pay”. The service will allow users to send money to one another for free or make purchases from small businesses, without ever leaving the chat platform.
Brazil where WhatsApp has 120 Million users is its second-largest market after India, where its efforts to launch a payments service have been held up for two years by regulators.
The move comes as Facebook continues its push to facilitate more shopping on the platform, allowing it to gather data around spending patterns, and to compete with e-commerce giant Amazon. Currently, the company has started to roll out Facebook Pay, a similar service, on its main Facebook platform and Messenger app, while last month it launched Facebook Shops to allow sellers to create digital storefronts on Facebook or Instagram.
According to WhatsApp, it will be facilitating peer-to-peer payments for users for free, and that the system would integrate with Facebook Pay so that users’ card information would be saved across both services. Small businesses, which can already respond to questions from users and upload a catalogue of products in WhatsApp’s business version, will have to pay a 3.99 per cent processing fee to receive customer payments.
Payment processing will be facilitated by Cielo. The system will support debit or credit cards from Banco do Brasil, Nubank, and Sicredi on the Visa and Mastercard networks.