WhatsApp users can now send and receive money for free through Facebook Pay after Facebook launched the digital service in Brazil.
Facebook chose Brazil because Brazil is the only country in the world where virtually everyone uses WhatsApp to chat and make business deals.
Through what Facebook is calling WhatsApp Pay, users will be able to send money to one another for free or make purchases from small businesses.
“Because payment on WhatApp is enabled by Facebook Pay, in future, we want o make it possible for people and businesses to use the same card information across Facebook’s family of apps,” said Facebook.
Mark Zuckerberg, the CEO, and Founder of Facebook says the company has plans to roll out the same mode of payment in India, Indonesia, and Mexico.
Transaction from person to person will be free (for now) but businesses will have to pay 3.99 percent commission to WhatsApp as facilitation fee.
Users must link their bank cards to their WhatApp account and transactions are secured by a fingerprint sensor or a six-digit PIN code.
WhatsApp is eyeing its more than two billion users across the world for the success of its new payment products. Analysts, however, say it might not succeed in Africa.
At one time, Mark Zuckerberg came to Kenya to benchmark on Safaricom’s M-Pesa. His payment system, however, is likely not to succeed in Kenya due to the use of cards.
Many Kenyans do not use bank cards and the few who have to use it mainly to withdraw cash from their bank accounts. Small businesses, even those with a shop on Facebook use M-Pesa to receive payments.
“WhatsApp cannot be a threat to M-Pesa. M-Pesa has already established itself anybody who wants to compete with it must come up with something better,” said John Ooko, an economic analyst.