WhatsApp users in Brazil can now pay merchants through the app
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Loading... - Atifa Fares
- 01 Jun 2023
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WhatsApp is set to revolutionize the way Brazilians shop by enabling direct payments to businesses within the chat platform. This groundbreaking move allows users in Brazil to enjoy a seamless end-to-end shopping experience, from product discovery to making payments, all without leaving the app. The introduction of merchant payments on WhatsApp finally opens up the lucrative Brazilian market to this feature.
In an announcement by Mark Zuckerberg, he revealed that users would now have the convenience of "paying local businesses right in a WhatsApp chat." This new feature offers a secure and hassle-free checkout process, eliminating the need to visit external websites, open additional applications, or make in-person payments. Initially, this capability will be rolled out to a select group of businesses, with plans to expand its availability to a wider audience in the near future, as stated by the company.
Previously, WhatsApp Pay in Brazil only facilitated peer-to-peer transactions. Due to regulatory constraints, Meta, the parent company of WhatsApp, was unable to extend this functionality to include purchases from merchants. To work around this limitation, shops resorted to using third-party payment services to generate payment links, which were then shared via WhatsApp. However, this workaround proved to be less than ideal for both the merchant and the customer, lacking a seamless experience.
At present, there is no specific data available on the number of small businesses operating on WhatsApp in Brazil. However, the company's previous announcement in 2020 stated that over 5 million businesses in the country were already utilizing WhatsApp for their operations.
In the past year, WhatsApp introduced a "Directory" feature in Brazil, resembling a Yellow Pages directory. This feature empowered users to search for various businesses across different sectors, such as food and drink or travel. Combining this directory feature with the new merchant payment functionality allows users to discover businesses, add desired items to their cart, and conveniently complete the payment process within the app.
To facilitate payments, WhatsApp supports various debit, credit, and pre-paid cards issued by numerous participating banks, including Mastercard and Visa. Businesses can link their accounts to service providers like Cielo, Mercado Pago, or Rede to accept these payments. These service providers had already established the necessary technical infrastructure for peer-to-peer payments on WhatsApp in Brazil.
WhatsApp had previously collaborated with Reliance Jio in India to introduce an end-to-end shopping experience, enabling customers to order groceries through the app. Reports indicate that JioMart experienced a significant increase in active users as a result of this integration with WhatsApp.
In February, Zuckerberg declared the "year of efficiency" for Meta, highlighting the company's focus on cost reduction and revenue generation. Consequently, this opportune moment serves as the ideal launchpad for introducing merchant payment services to the Brazilian market, which boasts a user base of over 120 million WhatsApp users.
The adoption of digital payments in Brazil has surged in recent years. Data reveals that by last year, over 124 million individuals were already utilizing Pix, an instant payment platform managed by the country's central bank.
