Brazil's government-run payments system has become dominant

WhatsApp is omnipresent for communication in Brazil, and WhatsApp Pay was ready before Pix, but the government blocked the launch to launch Pix first.[1] I rarely see this mentioned.

[1] https://www.reuters.com/article/technology/brazil-suspends-w...

Well I'm thanking the government for saving us from yet another Facebook monopoly thorough first mover advantage and network effects.

It's a question of national security not to let Meta eat that cake, and Brasil made the right choice.

Tangentially related, I've heard talk of EU alternative to VISA and Mastercard, which I also believe is the right direction.

These systems are not a direct alternative to Visa/Mastercard. They offer no credit and give no fraud protection and no way to revert transactions (ie you can never get your money back once you send it).

Although they can replace a lot (most?) of existing transactions that are currently done through credit cards, there is still a place for them.

Same in India. WhatsApp wanted to use the payment system UPI but wasn't granted permission to do. Same reason I think - one app that handled all communication and all payments would have been too powerful.

WhatsApp Pay is available today in Brazil. The official reason for blocking the launch was missing paperwork, but word on the street at the time was that it was to favor Pix. This is all mentioned in the Retuers article. The reasons for favoring Pix are left for one to speculate. You say national security, the other says financial surveillance and control over the population. Time will tell.

I'd much rather let the Central Bank handle my instant payments, than Meta.

This is presented as problematic, but I don’t think it’s a negative thing.

You wouldn’t want a foreign company with billions of dollars in their war chest in charge of your countries payment system.

Financial surveillance would happen either way. It’s either from your government or to a foreign company, bundled and sold en mass.

So do most Brazilians, as today that choice is available. It's interesting how being the first to launch contributed to that preference, regardless of the widespread usage of WhatsApp. There are other interesting factors to consider. For example, a lot of people had WhatsApp but no bank account. As mentioned in The Economist's article there have been changes to the banking sector brought by Pix as well. Anyway, an interesting case study, and that's why I mentioned it.

In this case, maybe. But it's not the only option. The old payment system was a bit more private, as payments went through commercial banks and one needed a court order to access transaction history. According to The Economists' article the instant payment system in other countries adopts a similar scheme, which is more private than Brazil's, and which could have been adopted here too. Also, there exists technology today enabling private micro-transactions, such as Monero. But governments - including Brazil's - prevent exchanges to offer it. Europe is no different.[1] One may argue this prevents abuse, which may be true, but it also prevents financial privacy.

[1] https://support.kraken.com/hc/en-us/articles/support-for-mon...

It's an interesting topic for study. Being the first to launch wasn't the only factor, but certainly an important one - WhatsApp Pay is available today, but it's nowhere near as popular as Pix. That's why I mentioned it. With that being said, I don't think people need "saving" from choosing to use a service. It's not certain that WhatsApp Pay would really take off as much as Pix did. I also don't think one should be thankful for having one monopoly replaced by another (in the sense of market dominance, you can still use alternative payment methods). Imagine instead of WhatsApp Pay it was WhatsApp itself. Meta is no saint, but at least messages are E2E encrypted. How would GovApp look like? As mentioned in the article, Pix has every transaction go directly through the central bank, as opposed to going through commercial banks like traditional payment methods. It may provide great usability, but also concentrates power and risk, as written in The Economist. So far there is no indication this power has been used in any malicious way, or that any significant breach occurred, but the infrastructure for that is there, and governments change. That should at least be in one's mind, if one values some kind of personal financial freedom.

With everything that Pix offers but WhatsApp Pay doesn't, I don't think WhatsApp Pay would hold a candle even if it were launched before.

Isn't that what any other payment system and most of the banks around the world are - a foreign company with billions of dollars in charge of payment system in a country.

VISA, Mastercard, HSBC, UnionPay, ICBC, Santander... Or is this all Brazilian technology?

The difference is that Meta is privacy data hoarder, not that it's a foreign company. And it's not "in charge of countries payment system", because that's pretty-much impossible, but "one of the payment systems in the country".

What people outside of Latin America don't realize that "they were missing some documentation" is just not true for companies of the size of Meta. They have the best lawyers in the world and I'm pretty sure they used them to prepare all the documentation for this big launch. "You're missing a document" means: we're just fucking around and not letting you in.

Good to hear your words loyalty and patriotism, dear citizen! I will contact your local commissar and make sure he increases your social credit score by 5 points.

But we must also be realistic if we want to win against our eternal enemy Eastasia, and admit that Facebook coin would never be a monopoly because Visa, Mastercard and cash exist.

Thanks, maybe someday I will finally be promoted to Internet Shill First Class.

But seriously, it would still be a monopoly on the UPI-like segment. Visa and Mastercard charge fees that make them less attractive to some users and make it harder on some users. There are good reasons Pix replaced much of physical cash use that cards didn't. And Visa and Mastercard are also American companies. Don't they sell transaction data?

And meh, at least I can vote for my president, but not even the Facebook shareholders can vote Zuckerberg out IIRC. Although Zuck can't arrest me so I don't know.

Why? Your own government can do a whole lot more to you than a foreign corporation.

That's why China created UnionPay, so it wouldn't be held hostage to a large foreign corp (Visa, MC) for CC payments.

But most countries didn't have that capability. Kudos to Brazil for putting something together for domestic digital payments so as not to rely on a foreign company.

Good!

The president of the Brazilian Central Bank is accountable. Zuckaberg isn't.

Well, I can vote so that the thing my government does to me is something I want.

The foreign corporation will always be exclusively interested in doing things to me that generate revenue for them.

> Well, I can vote so that the thing my government does to me is something I want.

You better hope that your interests closely align with those of millions of your compatriots.

And that no one with political power has a personal vendetta against you.

i hate this expansion of national security justification and securitization rhetoric - whether it is the US justifying tariffs or deportation or Brazilians justifying no fair play under the law or trying to jail presidential candidates.

actually, foreign capital and foreign investment is good - and fair play before the law facilitates that.

securitization and anti-globalization makes us all poorer, worse off, and more prone to conflict. lawfare is an addictive drug and can lead to serious outcomes, as history in Brazil shows any number of times - like even with the current president.

> or trying to jail presidential candidates.

not trying, jailing. Soon, we will have the second jailed presidential candidate in less than 10 years. Many Brazilians do believe that this is a sign that the Justice System is working, tho.

>You better hope that your interests closely align with those of millions of your compatriots.

corporation NEVER has my interests in mind, so coordinating millions is easier

>And that no one with political power has a personal vendetta against you.

same argument can be used with corporations

it's kinda funny seeing us-american always baffled that we have a somewhat functional democracy in contrast to their corporatocracy

Visa and Mastercard are agents for the customer, who benefits greatly from instant and convenient transactions, fraud protection, currency conversion, and credit lines. The merchant pays them for access to these customers, and I have to say that the fees are small for what an amazing service these networks provide. I don't think neither their fees nor their profits are outrageous.

While Pix is a very impressive system, they offer no benefit to the customer over credit/debit cards. Only benefits to the merchants. For inter-personal transactions it is great, and for micro businesses. But as soon as your business grows beyond that, you will want to accept card payments.

If Visa and Mastercard sell transaction data, can you point me to where I can purchase this data? Everybody is saying this is the case, but forgive me for having doubts. Is this what you are talking about? https://usa.visa.com/solutions/visa-commercial-data-solution...

From what I understand, they are selling data in the aggregate, not individual transactions.

Control over the population? That's some conspiracy theory.

Those points are true, but a private corporation can't take away my life, liberty, or property under the threat of violence.

Literally 1984. Literally!

Meanwhile in reality: soory, out services are not available anymore because your goverment did a hecking bad thing and we don't like it. And we are taking the rest of your money btw

Yeah, there was already alternatives before pix, like PicPay/Mercado Pago, and Pix just "killed" them (people still use to be clear, but just as a normal payment app)

Nothing stops the government from blocking your Pix transactions on a whim. They can just turn off your money whenever they want. They can confiscate your money any time if they want. They can do pretty much anything.

Conspiracy theory? It's cyberpunk stuff, the likes of which we see in fiction. Only it's not fiction. We're watching the whole thing unfold right before our very eyes.

I remember watching videos of people at events from many years ago. They warned us all about this stuff, explored all the possible consequences. It's pretty bleak. And now I'm living in this reality, the knowledge of the danger weighs down on me every day where I have to use the system. And people like you come here and calls us conspiracy theorists.

WhatsApp does handle UPI though. Were they denied in the past?

They could have always done it at your bank as well. Easy electronic transfer changes nothing in that regard.

> Tangentially related, I've heard talk of EU alternative to VISA and Mastercard, which I also believe is the right direction.

There is Wero, I guess similar to Pix as an alternative for instant payment like PayPal, but it's meant to be used with your bank account and not a lot of banks support it.

WhatsApp pay wouldn’t be an investment. All money made from it, directly or indirectly, would go straight to the US

WhatsApp had implemented the feature as early as 2018 but they were denied permission to launch. They were finally granted permission in 2020 … but only to onboard 1 million users. This limit was increased to 100 million in late 2022 and then removed in late 2024. (https://coingeek.com/whatsapp-pay-to-expand-upi-services-to-...).

WhatsApp currently has 600 million active users in India and has been the most popular app for a long time. If it had been granted permission in 2018 it would be the most popular UPI app now. There wouldn’t be a competitive app ecosystem like there is now.

> [the government can] take away my life, liberty, or property under the threat of violence.

I do not envy your life situation if this is something that you have to genuinely worry about.

that’s exactly how investments work. you build out something or fund the building out of something and then some of the returns are repatriated to the investor.

in this case, you invest in building out a compliant and easy money transfer service. in other cases, you invest in a toll road, etc. etc.

the whole point of investment is it is a win-win

They have done it before. The difference is you can withdraw your cash if you see it coming. The government's end game is to get rid of physical cash with Pix and soon Drex.

Without physical cash, your finances are one hundred percent controlled by the government. Sure, it's convenient, but you pay for that convenience with your freedom.

Blackwater?

Yup, my comment was directed at those who want to prevent electronic money. But it’s no different than earlier banking.

I support cash and gold as well.