WhatsApp today launches the payment and money transfer service in the country. It is the first market in which the messaging app, which belongs to Facebook, releases this type of financial transaction. The company closed a partnership with the acquirer Cielo, the largest Brazilian payments processor.
“As of today, Brazil is the first country to receive this service and we think it will help people and small and medium businesses in an important period. It is safer and more convenient than money, ”said Matt Idema, WhatsApp's chief operating officer, to Valor.
Valor anticipated, on April 27, that WhatsApp and Cielo were in advanced negotiations to offer the service. At that time, WhatsApp reported that it was still analyzing how to allow payment on the app and a source close to Cielo said that there would be no exclusivity. Guide, at the time, evaluated the impact for Cielo as positive, due to the potential increase in the volume of transactions.
A few years ago it was speculated in the financial and technology market when WhatsApp would take this step, taking as a reference the Chinese messaging app WeChat - which has become one of the largest mobile payment platforms in China. In 2018, WhatsApp launched the test model payment system in India, in a beta version limited to one million users. Since then he has been making adjustments. According to Idema, it took two years to develop the service and the model launched in Brazil has been tested, in recent weeks, by a group of employees of companies in the group.
In principle, transactions in the country can be made by those who have debit or credit cards from Banco do Brasil, Nubank and Sicredi with Visa and Mastercard. "For us it is important to have an open platform, so we will add other banks and acquirers over time," he said.
Transfers from person to person will have a limit of R $ 1,000 per transaction, 20 transactions per day can be made, with a monthly limit of R $ 5,000. Payments for companies, on the other hand, have no limitations, as long as they are for establishments in the country and in national currency.
According to Idema, there will be no fees for the individual user. For companies, the rate is 3.99% on transactions. "It's free for people to send and receive money, and for a merchant it's a typical payment transaction fee," said the executive. The cost is a compromise between the fees charged by Cielo for debit and cash credit with a purchased machine - which, according to the “Cielo Blog”, is 2.39% and 4.99% respectively.
WhatsApp strongly bets on the use of this system by small traders in Brazil, not only due to the extensive number of this type of establishment but also due to the current moment of social isolation in the midst of the pandemic of covid-19. "Many small companies in Brazil already use WhatsApp in their businesses, to be in contact with customers and exchange information, and now they will be able to effectively use the application for payment," said Idema. “It can have a big impact for small traders, who are the basis of the Brazilian economy, especially in this period of social isolation. In addition, it will help them to enter the universe of the digital economy, encouraging bankarisation ”, he added.
Small businesses already use the app to send payment links, for example, or receive deposit confirmations from customers, made in another medium - such as PayPal or banking applications. “The technology will take thousands of companies out of informality and help with financial inclusion. The launch of the service becomes even more important to overcome the delicate moment caused by the pandemic ”, said Paulo Caffarelli, Cielo's president, in a statement.
WhatsApp does not reveal estimated volume, users and revenue for the payment service. According to Idema, the plan for the first weeks and months is to adapt the service as the company receives the users' perceptions. “The goal is not to be a major financial generator for the group in the medium term, but a service. Perhaps it will be a revenue line for us in the future, ”said the operations director.
For reference, WeChat has 1.2 billion users - 800 million use the WeChat Pay service, according to the company's balance sheet for the last quarter, with an average of 1 billion transactions per day. There are 50 million active merchants in the payment service. Belonging to the Tencent group, the application was one of the main drivers of the migration of the economy of large Chinese cities to mobile payment, at the expense of paper money or even plastic cards.
According to the director of operations for WhatsApp, the application's payment system is activated by Facebook Pay - a payment system that, until now, only operated in the United States. This link was made so that, in the future, users can use the same data for payments in all applications in the group.
At the results presentation earlier this year, Facebook President Mark Zuckerberg said the WhatsApp payment system should also be launched this year in Mexico, Indonesia and, this time in an official version, in India.
WhatsApp today launches the payment and money transfer service in the country. It is the first market in which the messaging app, which belongs to Facebook, releases this type of financial transaction. The company closed a partnership with the acquirer Cielo, the largest Brazilian payments processor.
“As of today, Brazil is the first country to receive this service and we think it will help people and small and medium businesses in an important period. It is safer and more convenient than money, ”said Matt Idema, WhatsApp's chief operating officer, to Valor.
Valor anticipated, on April 27, that WhatsApp and Cielo were in advanced negotiations to offer the service. At that time, WhatsApp reported that it was still analyzing how to allow payment on the app and a source close to Cielo said that there would be no exclusivity. Guide, at the time, evaluated the impact for Cielo as positive, due to the potential increase in the volume of transactions.
A few years ago it was speculated in the financial and technology market when WhatsApp would take this step, taking as a reference the Chinese messaging app WeChat - which has become one of the largest mobile payment platforms in China. In 2018, WhatsApp launched the test model payment system in India, in a beta version limited to one million users. Since then he has been making adjustments. According to Idema, it took two years to develop the service and the model launched in Brazil has been tested, in recent weeks, by a group of employees of companies in the group.
In principle, transactions in the country can be made by those who have debit or credit cards from Banco do Brasil, Nubank and Sicredi with Visa and Mastercard. "For us it is important to have an open platform, so we will add other banks and acquirers over time," he said.
Transfers from person to person will have a limit of R $ 1,000 per transaction, 20 transactions per day can be made, with a monthly limit of R $ 5,000. Payments for companies, on the other hand, have no limitations, as long as they are for establishments in the country and in national currency.
According to Idema, there will be no fees for the individual user. For companies, the rate is 3.99% on transactions. "It's free for people to send and receive money, and for a merchant it's a typical payment transaction fee," said the executive. The cost is a compromise between the fees charged by Cielo for debit and cash credit with a purchased machine - which, according to the “Cielo Blog”, is 2.39% and 4.99% respectively.
WhatsApp strongly bets on the use of this system by small traders in Brazil, not only due to the extensive number of this type of establishment but also due to the current moment of social isolation in the midst of the pandemic of covid-19. "Many small companies in Brazil already use WhatsApp in their businesses, to be in contact with customers and exchange information, and now they will be able to effectively use the application for payment," said Idema. “It can have a big impact for small traders, who are the basis of the Brazilian economy, especially in this period of social isolation. In addition, it will help them to enter the universe of the digital economy, encouraging bankarisation ”, he added.
Small businesses already use the app to send payment links, for example, or receive deposit confirmations from customers, made in another medium - such as PayPal or banking applications. “The technology will take thousands of companies out of informality and help with financial inclusion. The launch of the service becomes even more important to overcome the delicate moment caused by the pandemic ”, said Paulo Caffarelli, Cielo's president, in a statement.
WhatsApp does not reveal estimated volume, users and revenue for the payment service. According to Idema, the plan for the first weeks and months is to adapt the service as the company receives the users' perceptions. “The goal is not to be a major financial generator for the group in the medium term, but a service. Perhaps it will be a revenue line for us in the future, ”said the operations director.
For reference, WeChat has 1.2 billion users - 800 million use the WeChat Pay service, according to the company's balance sheet for the last quarter, with an average of 1 billion transactions per day. There are 50 million active merchants in the payment service. Belonging to the Tencent group, the application was one of the main drivers of the migration of the economy of large Chinese cities to mobile payment, at the expense of paper money or even plastic cards.
According to the director of operations for WhatsApp, the application's payment system is activated by Facebook Pay - a payment system that, until now, only operated in the United States. This link was made so that, in the future, users can use the same data for payments in all applications in the group.
At the results presentation earlier this year, Facebook President Mark Zuckerberg said the WhatsApp payment system should also be launched this year in Mexico, Indonesia and, this time in an official version, in India.