Brazil Suspends WhatsApp Payments(bloomberg.com)
bloomberg.com
Brazil Suspends WhatsApp Payments
https://www.bloomberg.com/news/articles/2020-06-23/brazil-s-central-bank-suspends-whatsapp-payments
47 comments
Why doesn't Facebook do it in the US? Too much opposition from the large payment processing lobby?
> Why doesn't Facebook do it in the US?
Facebook just got bloodied by regulators and the Congress over Libra.
U.S. payment rules are also quite strict. Brazil’s are too, but Facebook was comfortable ignoring those.
> Too much opposition from the large payment processing lobby?
If payments regulation worked like that, Stripe and PayPal and Venmo and Apple Pay wouldn’t exist.
Facebook just got bloodied by regulators and the Congress over Libra.
U.S. payment rules are also quite strict. Brazil’s are too, but Facebook was comfortable ignoring those.
> Too much opposition from the large payment processing lobby?
If payments regulation worked like that, Stripe and PayPal and Venmo and Apple Pay wouldn’t exist.
> If payments regulation worked like that, Stripe and PayPal and Venmo and Apple Pay wouldn’t exist.
I don't know how much of the complex regulatory barriers to the payments industry are designed by industry insiders with an explicit aim to stifle competition, but the fact that there are only a small number of actors in the space indicates that it's far from a "free market".
You can have a corrupt market full of lobby-influenced regulatory barriers and still have more than a pure monopoly. Sometimes you have a small number of competitors, or 1-2 firms with the lion's share of the market. Sometimes you have a cartel. Sometimes newcomers even break through regulatory barriers through innovation!
All that to say that your evidence doesn't do much to support your claim.
I don't know how much of the complex regulatory barriers to the payments industry are designed by industry insiders with an explicit aim to stifle competition, but the fact that there are only a small number of actors in the space indicates that it's far from a "free market".
You can have a corrupt market full of lobby-influenced regulatory barriers and still have more than a pure monopoly. Sometimes you have a small number of competitors, or 1-2 firms with the lion's share of the market. Sometimes you have a cartel. Sometimes newcomers even break through regulatory barriers through innovation!
All that to say that your evidence doesn't do much to support your claim.
> it's far from a "free market"
This goalpost was never set. The original assertion was industry insiders blocked Facebook from launching WhatsApp Payments in the U.S.
Stripe and Venmo and Apple are valid counter-arguments to that claim. Barriers exist. But if those companies could surmount them, Facebook, with its massive lobbying arms, could as well. The explanation is thus a bad one for the observation.
This goalpost was never set. The original assertion was industry insiders blocked Facebook from launching WhatsApp Payments in the U.S.
Stripe and Venmo and Apple are valid counter-arguments to that claim. Barriers exist. But if those companies could surmount them, Facebook, with its massive lobbying arms, could as well. The explanation is thus a bad one for the observation.
They already have Facebook Pay on messenger, and WhatsApp is mostly unheard of. Maybe it doesn't make sense to launch it in the USA.
WhatsApp is however overwhelmingly used in Brazil, and highly lacking good Venmo-like apps. I did not like the Brazilian Fed getting in the way with regulations before it even launched. Sends the wrong message to foreign investors considering Brazil.
WhatsApp is however overwhelmingly used in Brazil, and highly lacking good Venmo-like apps. I did not like the Brazilian Fed getting in the way with regulations before it even launched. Sends the wrong message to foreign investors considering Brazil.
Mostly unheard of?! Besides my parents, I dont know anyone that doesnt use WhatsApp in the US.
Most people I interact with in the US actually use SMS or iMessage, that's why I have hold this view. It might be a bit dated though.
yes I think it's somewhat dated. I travel (well traveled) to the US frequently and there was basically no Whatsapp user I met. (compared to 50% of the pop. In Germany). Apparently now there are almost 70 million users in the US.
It really always baffled me why Americans were using text messaging for so long (and complaining about lack of encryption and so on)
It really always baffled me why Americans were using text messaging for so long (and complaining about lack of encryption and so on)
>It really always baffled me why Americans were using text messaging for so long
Because our mobile plans gave us gigantic buckets (thousands of SMS messages per month, then unlimited) before most other countries. It was the lack of such that drove the growth of WhatsApp and similar systems elsewhere.
>(and complaining about lack of encryption and so on)
Yeah, no one does that, any more than people complain about the lack of encrypted email.
(Yes, yes, it's possible to do both. My point is that most people don't bother in the first place.)
Because our mobile plans gave us gigantic buckets (thousands of SMS messages per month, then unlimited) before most other countries. It was the lack of such that drove the growth of WhatsApp and similar systems elsewhere.
>(and complaining about lack of encryption and so on)
Yeah, no one does that, any more than people complain about the lack of encrypted email.
(Yes, yes, it's possible to do both. My point is that most people don't bother in the first place.)
> (and complaining about lack of encryption and so on)
Well most people here in Germany constantly complain about the lack of privacy thanks to Facebook and still don't mind using WhatsApp.
I haven't been to the US myself, but I have met a lot of internation students from the US and Canada. All of them were mainly using either iMessage or Facebook Messenger, they were really surprised why everyone is using WhatsApp here.
Anyways, actually privacy focused apps like Threema or Signal don't seem to be popular anywhere, so I don't think there is a significant difference
Well most people here in Germany constantly complain about the lack of privacy thanks to Facebook and still don't mind using WhatsApp.
I haven't been to the US myself, but I have met a lot of internation students from the US and Canada. All of them were mainly using either iMessage or Facebook Messenger, they were really surprised why everyone is using WhatsApp here.
Anyways, actually privacy focused apps like Threema or Signal don't seem to be popular anywhere, so I don't think there is a significant difference
Most people I know only use WhatsApp specifically with friends who came from/are in other countries. Even then I personally know more people who use LINE than WhatsApp for some reason. Internal to the US, very few people I know use WhatsApp for group chats. (I expect its an age thing though, and that younger people are more likely to be using WhatsApp).
I've never used WhatsApp and as far as I know neither do my friends. I've never had anyone request to use it either.
Less than 10% of my network on WhatsApp.
> and highly lacking good Venmo-like apps
There's a few popular apps that allow you to share payments in Brazil, such as:
PicPay Rappi Mercado Pago
There's a few popular apps that allow you to share payments in Brazil, such as:
PicPay Rappi Mercado Pago
The so-called "super apps", such as Rappi, are getting widely popular in Latin America. Maybe Facebook saw it as an opportunity for turning WhatsApp into their own super app.
It's also an opportunity to kill competition, since almost everybody uses WhatsApp.
It's also an opportunity to kill competition, since almost everybody uses WhatsApp.
Paywall: https://outline.com/thcKSd
Press Esc within a second of loading the page to kill the paywall. Works for many other news sites that rely heavily on JS and don't partially fetch previews but just try to hide the content.
No surprises, the country is deeply hostile to capitalism and innovation. Brazil is not poor by accident. Too bad, as this could have been a boon to small businesses.
https://www.reuters.com/article/us-brazil-politics-chicagobo...
Also as a reminder, Brasil had a military dictatorship overthrow a social democratic movement in order to implement economic privatization. Bolsonaro is famously a huge fan of the dictatorship years.
The dictatorship was US backed.
https://en.wikipedia.org/wiki/1964_Brazilian_coup_d%27%C3%A9...
Also as a reminder, Brasil had a military dictatorship overthrow a social democratic movement in order to implement economic privatization. Bolsonaro is famously a huge fan of the dictatorship years.
The dictatorship was US backed.
https://en.wikipedia.org/wiki/1964_Brazilian_coup_d%27%C3%A9...
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That's quite a jump to conclusion... I don't think that the issue here is Brazil's position on capitalism or innovation, there are other companies providing similar services there.
The issue seems to be a juggernaut company like Facebook, with all the flaws that it has, trying to enter the payment sector of a developing country without regulation or notice.
The issue seems to be a juggernaut company like Facebook, with all the flaws that it has, trying to enter the payment sector of a developing country without regulation or notice.
> a juggernaut company like Facebook
More likely Brazil's central bank doesn't want competition with its own payment system (Pix).
More likely Brazil's central bank doesn't want competition with its own payment system (Pix).
The Central Bank wants a system that's interoperable, so in certain ways, Pix promotes competition.
Honestly! It kind of reminds me of Marc Andreessen's "Anti-colonialism has been economically catastrophic for the Indian people for decades. Why stop now?” comment.
It’s working out for China somehow though ..
> the country is deeply hostile to capitalism and innovation
Sure, but payment processing, money transfers, e-wallets etc. are regulated matters in Brazil as they are in the EU and in the US.
Facebook is not registered as a financial institution and is not a participant in the Brazilian Payments System, unlike PayPal and other local and international players, so you can figure out why the Central Bank put a stop to Facebook's launch.
Sure, but payment processing, money transfers, e-wallets etc. are regulated matters in Brazil as they are in the EU and in the US.
Facebook is not registered as a financial institution and is not a participant in the Brazilian Payments System, unlike PayPal and other local and international players, so you can figure out why the Central Bank put a stop to Facebook's launch.
Yep, only people to suffer will be the little ones whilst the larger players get to be piggish on the fat margins.
Brazil has massive investments coming in from foreign investors on a steady basis because of the capitalism and innovation.
I believe this person probably thinks Brazil had two socialist presidents, Lula and Dilma (plus a socialist interim one, Michel Temer) prior to the God-chosen one it has now.
I wouldn't engage.
I wouldn't engage.
Brazil is a corrupt highly taxed basket case. I know plenty of people who left.
The govt there tried to buy some software from me and then tried to tax the international sale by %40 after the price was agreed. I added the tax on top and they pulled out.
I have a unofficial free for Latin America donation program for different software because of all the end users from there who can’t afford it. They write to me explaining their situation.
I think a distinction should be made, if at all possible, between capitalism and corporatism. Brazil is pro-corporatist and anti—capitalist. This is common in Latin America with its crazy wealth distribution.
The govt there tried to buy some software from me and then tried to tax the international sale by %40 after the price was agreed. I added the tax on top and they pulled out.
I have a unofficial free for Latin America donation program for different software because of all the end users from there who can’t afford it. They write to me explaining their situation.
I think a distinction should be made, if at all possible, between capitalism and corporatism. Brazil is pro-corporatist and anti—capitalist. This is common in Latin America with its crazy wealth distribution.
> tax the international sale by %40
I'm not surprised. In general, import duties are around 60%, and that's not even the full story. The (foreign) company I work for sent me a development board once; when it arrived here I found out that, in addition to those 60%, I'd have to pay 18% state taxes. I was expecting this to add up to 78%, or even 1.6 * 1.18 = 89%, but in fact it's computed like (1.6 / (1 - 0.18)) = 95%.
Ostensibly, these tariffs are meant to protect the local industry from foreign competition. I heard that there are certain other countries trying to do the same; they should be careful what they wish for.
I'm not surprised. In general, import duties are around 60%, and that's not even the full story. The (foreign) company I work for sent me a development board once; when it arrived here I found out that, in addition to those 60%, I'd have to pay 18% state taxes. I was expecting this to add up to 78%, or even 1.6 * 1.18 = 89%, but in fact it's computed like (1.6 / (1 - 0.18)) = 95%.
Ostensibly, these tariffs are meant to protect the local industry from foreign competition. I heard that there are certain other countries trying to do the same; they should be careful what they wish for.
That is rough. I was unaware of the heavy import taxes. But they’re the ones buying so they should pay the tax, expecting me to sell internationally tax inclusive was weird, and possibly a miscommunication with an intermediary, or someone was trying to pull a trick. I think my competitor must have done some transfer pricing with a local branch.
I understand the rational for protectionism and at the same time worry about the future it will lead to. The ability to buy just about anything from just about anywhere was one of the things I really liked about the US.
I understand the rational for protectionism and at the same time worry about the future it will lead to. The ability to buy just about anything from just about anywhere was one of the things I really liked about the US.
I've never seen international sales being tax inclusive. The buyer (or local branch) always pays, and they are responsible to pay the tax authorities.
As a Brazilian I think this measure is very flawed. In more than 30 years, the national industry regarding technology has gone from insignificant to nonexistent (excluding some specific monopolies with low end "junk").
These rates only harm the population and businesses that need to import technology to maintain work operations.
These rates only harm the population and businesses that need to import technology to maintain work operations.
Taxes in Brazil are very low except for taxes on imports. It's not anti-capitalist within its own economy. The startup scene in Brazil is thriving.
> Taxes in Brazil are very low
Bro, do you even lift?
https://www.dentons.com/en/issues-and-opportunities/global-t...
https://santandertrade.com/en/portal/establish-overseas/braz...
https://www2.deloitte.com/br/en/pages/tax/articles/sistema-t...
Bro, do you even lift?
https://www.dentons.com/en/issues-and-opportunities/global-t...
https://santandertrade.com/en/portal/establish-overseas/braz...
https://www2.deloitte.com/br/en/pages/tax/articles/sistema-t...
> "Deeply hostile to capitalism".
They are avoiding a monopoly to surge.
> "Brazil is poor".
I guess one has to travel.
They are avoiding a monopoly to surge.
> "Brazil is poor".
I guess one has to travel.
Speaking as a Brazilian - the country is an odd one. If you go by GDP it should be a rich country but it just isn't.
It's rightly classified as an emergent country. It has deep social and poverty problems that needs addressing even though it's a regional economic force.
Brazil is definitely capitalist but it's hard to do business there - 144th place in economic freedom index.
It's rightly classified as an emergent country. It has deep social and poverty problems that needs addressing even though it's a regional economic force.
Brazil is definitely capitalist but it's hard to do business there - 144th place in economic freedom index.
> If you go by GDP it should be a rich country
Not really. GDP is large, but that's only because the population is large. Per capita GDP is around US$ 9k, which makes us poorer than Mexico or Argentina. For comparison, per capita GDP in Sweden is something like US$ 54k.
I remember being taught in school that Brazil is the n-th richest country in the world, and if only that wealth were evenly distributed we could all enjoy a welfare state like in Europe. That is simply not possible. But I guess many people here still believe it because the country has a few highly visible pockets of wealth.
Not really. GDP is large, but that's only because the population is large. Per capita GDP is around US$ 9k, which makes us poorer than Mexico or Argentina. For comparison, per capita GDP in Sweden is something like US$ 54k.
I remember being taught in school that Brazil is the n-th richest country in the world, and if only that wealth were evenly distributed we could all enjoy a welfare state like in Europe. That is simply not possible. But I guess many people here still believe it because the country has a few highly visible pockets of wealth.
Comparing to Sweden is a bit extreme. Portugal's comparable GDP is 24k. It's still a factor of 3x but a lot of the costs in a welfare state scale with the wealth of the economy as they are just directly cost of labor. Having a reasonable welfare state, that's not world-class but isn't the US either, should be possible.
Yes, Brazil is practically halfway between Portugal and Angola. It's half the GDP per capita of Portugal, but twice that of Angola: https://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&...
Brazil is a country of contrasts. If you are upper middle class, you more or less live in a "Portugal", have excellent healthcare, your kids go to good schools and your retirement will be comfortable. If you are below a certain line, things get worse very quickly until you reach the poorest rural regions where you live effectively like the poorest people in the world.
Brazil should be wealthy. It has every advantage, huge amount of resources, no natural enemies ...
Resource curse? https://en.wikipedia.org/wiki/Resource_curse
But it also has 3rd world demographics. AFAIK Asian / Jewish / White Brazilians hold significantly more wealth than the Pardo and Black populations.