WhatsApp added a feature for in-app payment, currently operational for only users in Brazil, its second-biggest market after India. It is free for consumers to use, however, businesses are charged a 4% processing fee.
With over 2 billion users on WhatsApp, the tech giant is creating non-advertising revenue.
WhatsApp says in its blog post that, “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 catalogue, customers will be able to send payments for products as well. Making payments simple can help bring more businesses into the digital economy, opening up new opportunities for growth.”
“In addition, we’re making sending money to loved ones as easy as sending a message, which could not be more important as people are physically distant from one another. Because payments on WhatsApp are enabled by Facebook Pay, in the future we want to make it possible for people and businesses to use the same card information across Facebook’s family of apps.”
“We have built payments with security in mind and a special six-digit PIN or fingerprint will be required to prevent unauthorized transactions. To start, we will support debit or credit cards from Banco do Brasil, Nubank, and Sicredi on the Visa and Mastercard networks -and we are working with Cielo, the leading payments processor in Brazil. We have built an open model to welcome more partners in the future.”
Sending money or making a purchase on WhatsApp is free for people. Businesses will pay a processing fee to receive customer payments, similar to what they may already pay when accepting a credit card transaction.
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.