*The payments are enabled by Facebook Pay
After months of talks and trials, WhatsApp has finally pulled
the trigger on payments in its app. Today the Facebook-owned
messaging service announced that users in Brazil would be the first
to be able to send and receive money by way of its messaging app,
using Facebook Pay, the payments service WhatsApp owner Facebook
launched last year.
WhatsApp says in its blog post that the payments service — which
currently is free for consumers to use (that is, no commission fee
taken) but businesses pay a 3.99% processing fee to receive
payments — will work by way of a six-digit PIN or fingerprint to
complete transactions.
You use it by linking up your WhatsApp account to your Visa or
Mastercard credit or debit card, with initial local partners
including Banco do Brasil, Nubank and Sicredi. Cielo, a payments
processor, is also working with WhatsApp to complete transactions.
“We have built an open model to welcome more partners in the
future,” it noted.
The news comes as bit of a surprise. WhatsApp had been testing
its payments service among users in India for months (that trial
uses another system, not Facebook Pay but UPI), so many assumed
that the world’s second largest internet market would be the debut
region for the service.
But Facebook remains stuck in a regulatory maze in India that
has prevented it from expanding the payments service beyond a
small, limited launch, in what is otherwise the app’s biggest
market in terms of users. India has 400 million monthly active
users, while second-largest market Brazil has 120 million MAUs.
(And indeed, it would have an interesting position there because
of that size: While there are a number of other digital payments
services, including Google Pay and Paytm, there are no clear, large
and popular competitors offering payments within a messaging app in
the country.)
WhatsApp had been adopted informally for commercial purposes
almost from the very start: Small business owners have used it to
exchange messages with users around the sale of goods, what is in
stock and so on. But under the wing of Facebook — which acquired
the company in 2014 for $19 billion — WhatsApp started in earnest
the big task of bringing in a more formal set of business
services.
That’s included the launch of WhatsApp Business, which lets SMBs
post catalogues and stock links within the app; advertisers on
Facebook also can create links through to their WhatsApp
accounts.
But now with payments, WhatsApp, which has amassed over 2
billion users, is finally taking a more comprehensive commercial
plunge, giving people not just a place to chat about a product, or
even send payment details, but now to actually transact.
And that, in turn, gives WhatsApp and Facebook another shot at
building a revenue stream based on its vast scale, one which does
not turn the app over to monetising its users through ads and the
data that is amassed around them — the primary business model today
behind Facebook and Instagram, another major app in the Facebook
stable.
“Payments on WhatsApp are beginning to roll out to people across
Brazil beginning today and we look forward to bringing it to
everyone as we go forward,” the company said.
Users in Brazil will be able to use the payments service on
WhatsApp to make purchases from local businesses without leaving
their chat, the Facebook-owned service said.
“The over 10 million small and micro businesses are the
heartbeat of Brazil’s communities. It’s become second nature to
send a zap to a business to get questions answered. Now in addition
to viewing a store’s catalog, customers will be able to send
payments for products as well,” the company wrote in a blog
post.
Although WhatsApp has in theory been working on payments for
years; from what we understand, there were a lot of delays in part
due to how and where Facebook wanted WhatsApp to implement it. Now
that it’s launching with Facebook Pay, it seems that we know how
that struggle landed.
As for subsequent regions for launching the service, it’s not
clear whether Facebook will be open to working with other kinds of
payment methods, or even other payment rails beyond Facebook Pay,
or what kinds of use cases it will pursue for the service —
although the trial in India, using UPI, implies that it won’t just
be a one-size-fits-all approach.
These remain critical questions, considering that payment cards
and even bank accounts are not necessarily the norm in every
market, especially emerging markets; and that other kinds of
transactions such as remittances — where people transfer money to
friends, family and businesses that are often far away — are some
of the more popular uses of phones beyond simple calls and texts.
(And as we’ve been saying for years, the link between messaging and
remittances is a big one: messaging apps are where people carry out
their relationships and communication, so they are a natural place
to stay to send money.) The examples of payments in Brazil indicate
that remittances are very much on Facebook’s radar, so we’ll see
how and where it actually gets used.
A WhatsApp spokesperson declined to say more when asked for more
specific details about future plans beyond Facebook CEO Mark
Zuckerberg’s “More to come soon!”, from his own announcement. But
given the link with Facebook Pay, one obvious guess might be that
we’ll see payments rolled out in WhatsApp in markets where the
former service is now live, which include the U.S. and U.K.
“We’re continuing to roll out Facebook Pay on Facebook to more
countries outside the U.S. for existing payment experiences, which
vary by country and may include experiences such as in-game
purchases and fundraisers where already available,” a Facebook
spokesperson said. “As we’ve said previously, our goal is to bring
Facebook Pay to more people and places over time.”
*The payments are enabled by Facebook Pay
After months of talks and trials, WhatsApp has finally pulled
the trigger on payments in its app. Today the Facebook-owned
messaging service announced that users in Brazil would be the first
to be able to send and receive money by way of its messaging app,
using Facebook Pay, the payments service WhatsApp owner Facebook
launched last year.
WhatsApp says in its blog post that the payments service — which
currently is free for consumers to use (that is, no commission fee
taken) but businesses pay a 3.99% processing fee to receive
payments — will work by way of a six-digit PIN or fingerprint to
complete transactions.
You use it by linking up your WhatsApp account to your Visa or
Mastercard credit or debit card, with initial local partners
including Banco do Brasil, Nubank and Sicredi. Cielo, a payments
processor, is also working with WhatsApp to complete transactions.
“We have built an open model to welcome more partners in the
future,” it noted.
The news comes as bit of a surprise. WhatsApp had been testing
its payments service among users in India for months (that trial
uses another system, not Facebook Pay but UPI), so many assumed
that the world’s second largest internet market would be the debut
region for the service.
But Facebook remains stuck in a regulatory maze in India that
has prevented it from expanding the payments service beyond a
small, limited launch, in what is otherwise the app’s biggest
market in terms of users. India has 400 million monthly active
users, while second-largest market Brazil has 120 million MAUs.
(And indeed, it would have an interesting position there because
of that size: While there are a number of other digital payments
services, including Google Pay and Paytm, there are no clear, large
and popular competitors offering payments within a messaging app in
the country.)
WhatsApp had been adopted informally for commercial purposes
almost from the very start: Small business owners have used it to
exchange messages with users around the sale of goods, what is in
stock and so on. But under the wing of Facebook — which acquired
the company in 2014 for $19 billion — WhatsApp started in earnest
the big task of bringing in a more formal set of business
services.
That’s included the launch of WhatsApp Business, which lets SMBs
post catalogues and stock links within the app; advertisers on
Facebook also can create links through to their WhatsApp
accounts.
But now with payments, WhatsApp, which has amassed over 2
billion users, is finally taking a more comprehensive commercial
plunge, giving people not just a place to chat about a product, or
even send payment details, but now to actually transact.
And that, in turn, gives WhatsApp and Facebook another shot at
building a revenue stream based on its vast scale, one which does
not turn the app over to monetising its users through ads and the
data that is amassed around them — the primary business model today
behind Facebook and Instagram, another major app in the Facebook
stable.
“Payments on WhatsApp are beginning to roll out to people across
Brazil beginning today and we look forward to bringing it to
everyone as we go forward,” the company said.
Users in Brazil will be able to use the payments service on
WhatsApp to make purchases from local businesses without leaving
their chat, the Facebook-owned service said.
“The over 10 million small and micro businesses are the
heartbeat of Brazil’s communities. It’s become second nature to
send a zap to a business to get questions answered. Now in addition
to viewing a store’s catalog, customers will be able to send
payments for products as well,” the company wrote in a blog
post.
Although WhatsApp has in theory been working on payments for
years; from what we understand, there were a lot of delays in part
due to how and where Facebook wanted WhatsApp to implement it. Now
that it’s launching with Facebook Pay, it seems that we know how
that struggle landed.
As for subsequent regions for launching the service, it’s not
clear whether Facebook will be open to working with other kinds of
payment methods, or even other payment rails beyond Facebook Pay,
or what kinds of use cases it will pursue for the service —
although the trial in India, using UPI, implies that it won’t just
be a one-size-fits-all approach.
These remain critical questions, considering that payment cards
and even bank accounts are not necessarily the norm in every
market, especially emerging markets; and that other kinds of
transactions such as remittances — where people transfer money to
friends, family and businesses that are often far away — are some
of the more popular uses of phones beyond simple calls and texts.
(And as we’ve been saying for years, the link between messaging and
remittances is a big one: messaging apps are where people carry out
their relationships and communication, so they are a natural place
to stay to send money.) The examples of payments in Brazil indicate
that remittances are very much on Facebook’s radar, so we’ll see
how and where it actually gets used.
A WhatsApp spokesperson declined to say more when asked for more
specific details about future plans beyond Facebook CEO Mark
Zuckerberg’s “More to come soon!”, from his own announcement. But
given the link with Facebook Pay, one obvious guess might be that
we’ll see payments rolled out in WhatsApp in markets where the
former service is now live, which include the U.S. and U.K.
“We’re continuing to roll out Facebook Pay on Facebook to more
countries outside the U.S. for existing payment experiences, which
vary by country and may include experiences such as in-game
purchases and fundraisers where already available,” a Facebook
spokesperson said. “As we’ve said previously, our goal is to bring
Facebook Pay to more people and places over time.”