Decision to block WhatsApp, Ceilo partnership revoked by Brazilian Competition Agency

Brazil’s national competition regulator CADE came revoking its previous ruling on Tuesday through which it suspended Facebook Inc’s recent launch of a payment system in the country.

Facebook last month launched a payment messaging service in Brazil through Whatsapp in collaboration with Cielo SA., a card processing company which is Brazil’s largest card operator and is Latin America’s biggest payment system company by revenue and market worth.

CADE said in its statement that initial information provided by both Facebook and Cielo highlighted that their agreement about payment system arrangements does not limit each company to go into agreement with competing companies and also does not leave the customers with limited choices for their payment needs. But still, CADE will be looking into the partnership deal, said the regulator.

A WhatsApp spokesman in a statement said that the company is glad as the preventive restrictions on its payment service have been lifted quickly by the CADE.

For earlier restoration of payment service and to make WhatsApp users able to either send funds to friends and families or make payment for the products purchased through WhatsApp, the company will be working with Brazilian authorities.

Even CADE has ruled in favor of WhatsApp’s payment service which was still in the testing phase, it will not be possible for WhatsApp to restore the service soon. In a separate move by Brazil’s central bank, the payment service was blocked in the country last week because of the issues linked to Mastercard and Visa Inc.

The central bank last week ordered the two payment companies to stop working in collaboration with WhatsApp. The regulator ruled that the companies had to seek approval before going into such partnership deals.

Brazil is the second largest market for WhatsApp with 120 million users and launching a payment system which allows users to make payments through messaging is seems to be giving the local banks a tougher competition.