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Meta's (FB) WhatsApp Payment Service Suffers Setback In Brazil
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Meta Platforms’ long-term plans to launch payments to merchants (p2m) services via WhatsApp in Brazil has suffered setbacks due to clashes with potential payment partners.
WhatsApp in Brazil. has so far struggled to sign up local merchant acquirer companies, which process electronic payments, and are required to help launch and run the service in Latin America’s most populous country with 120 million users.
Meta’s plan to launch the p2m payment services are stalled due to failed negotiations with merchant acquirer companies. Per Financial Times, merchant acquirer companies claimed that the proposed fees from WhatsApp were too low and the legal terms drawn by the social media giant were too difficult to comply with.
Meta’s payment service efforts have not seen smooth sailing since its launch. Days after being launched in mid-2020, Meta rolled out the feature of payment transfer in India and Brazil. However, its efforts to launch the service were delayed due to regulatory pushback, citing concerns about competition, efficiency and data privacy.
In Brazil, in order to get approval for the p2m services, Meta has to get acquirer companies on board before the central bank can decide whether to approve the services. The central bank has cited that in order not to kill competition, WhatsApp is required to partner with multiple acquirers rather than one. The central bank has expressed concerns about whether there would be a clear option for smaller merchants to make a claim against Meta if any issue arises with payments.
Meta Plans to Tap Fresh Revenues With Financial Services
Meta has been planning to diversify away from primarily relying on advertising revenues.
Meta’s primary revenue generating source is advertising. The company has garnered advertising revenues of $114.93 billion in 2021, representing 97.46% of its total revenues in the reported year. Revenues from advertising increased 37% year over year.
However, Meta’s ad-based business model is under constant threat from increasing scrutiny by different governments as they are dropping legislations and ultimatums on its business policies. The ongoing Russia-Ukraine conflict has been a concern.
Chief Executive Officer, Mark Zuckerberg, has said that facilitating payment and e-commerce services would provide a new stream of income for the company and reduce its dependency on advertising revenues.
Further, Zuckerberg’s plan to launch payment services merge with the company’s bold plans to launch the metaverse. Meta is not only looking to create payment services in the real world but also in virtual reality.
In accordance with this, Meta is planning to introduce virtual coins, tokens and lending services to its social media apps. The company is exploring the idea of creating a virtual currency for the metaverse dubbed “Zuck Bucks.”
Meta is also trying to evolve its social media and chatting sites as NFT and cryptocurrency trading marketplaces, which will retain and attract customers amid stiff competition from other tech giants.
Meta is facing not only regulatory issues but stiff competition from other tech giants in the NFT marketplace.
Microsoft (MSFT - Free Report) is looking to explore the NFT space, which is experiencing massive growth from the beginning of 2021.
Microsoft’s M12 venture fund recently invested in NFT startup, Palm NFT Studio. The company raised $27 million, which will be utilized to develop projects on the Palm Protocol, an energy-efficient Ethereum sidechain.
Social media peer Twitter launched a tool that allows users to showcase NFTs as their profile pictures. The new tool designed by Twitter connects users’ Twitter accounts with their crypto wallets holding the NFTs.
Twitter is exploring the crypto universe and supporting NFT trading. Artists can use the platform to connect their crypto wallets and take payments directly through Twitter. They can also take tips in cryptocurrencies like Bitcoin and Ethereum through crypto wallet apps.
Zacks Rank & Stock to Consider
In the year-to-date period, Meta shares which carry a Zacks Rank #4 (Sell) have tumbled 35.4% compared with the Zacks Internet – Software industry's and the Zacks Computer and Technology sector's declines of 33.1% and 16.6%, respectively.
The current economic turmoil has resulted in the financial markets being extremely volatile. In order to stabilize your portfolio against uncertainties, you can consider the following stock.
Image: Bigstock
Meta's (FB) WhatsApp Payment Service Suffers Setback In Brazil
Meta Platforms’ long-term plans to launch payments to merchants (p2m) services via WhatsApp in Brazil has suffered setbacks due to clashes with potential payment partners.
WhatsApp in Brazil. has so far struggled to sign up local merchant acquirer companies, which process electronic payments, and are required to help launch and run the service in Latin America’s most populous country with 120 million users.
Meta’s plan to launch the p2m payment services are stalled due to failed negotiations with merchant acquirer companies. Per Financial Times, merchant acquirer companies claimed that the proposed fees from WhatsApp were too low and the legal terms drawn by the social media giant were too difficult to comply with.
Meta’s payment service efforts have not seen smooth sailing since its launch. Days after being launched in mid-2020, Meta rolled out the feature of payment transfer in India and Brazil. However, its efforts to launch the service were delayed due to regulatory pushback, citing concerns about competition, efficiency and data privacy.
In Brazil, in order to get approval for the p2m services, Meta has to get acquirer companies on board before the central bank can decide whether to approve the services. The central bank has cited that in order not to kill competition, WhatsApp is required to partner with multiple acquirers rather than one. The central bank has expressed concerns about whether there would be a clear option for smaller merchants to make a claim against Meta if any issue arises with payments.
Meta Platforms, Inc. Price and Consensus
Meta Platforms, Inc. price-consensus-chart | Meta Platforms, Inc. Quote
Meta Plans to Tap Fresh Revenues With Financial Services
Meta has been planning to diversify away from primarily relying on advertising revenues.
Meta’s primary revenue generating source is advertising. The company has garnered advertising revenues of $114.93 billion in 2021, representing 97.46% of its total revenues in the reported year. Revenues from advertising increased 37% year over year.
However, Meta’s ad-based business model is under constant threat from increasing scrutiny by different governments as they are dropping legislations and ultimatums on its business policies. The ongoing Russia-Ukraine conflict has been a concern.
Chief Executive Officer, Mark Zuckerberg, has said that facilitating payment and e-commerce services would provide a new stream of income for the company and reduce its dependency on advertising revenues.
Further, Zuckerberg’s plan to launch payment services merge with the company’s bold plans to launch the metaverse. Meta is not only looking to create payment services in the real world but also in virtual reality.
In accordance with this, Meta is planning to introduce virtual coins, tokens and lending services to its social media apps. The company is exploring the idea of creating a virtual currency for the metaverse dubbed “Zuck Bucks.”
Meta is also trying to evolve its social media and chatting sites as NFT and cryptocurrency trading marketplaces, which will retain and attract customers amid stiff competition from other tech giants.
Meta is facing not only regulatory issues but stiff competition from other tech giants in the NFT marketplace.
Microsoft (MSFT - Free Report) is looking to explore the NFT space, which is experiencing massive growth from the beginning of 2021.
Microsoft’s M12 venture fund recently invested in NFT startup, Palm NFT Studio. The company raised $27 million, which will be utilized to develop projects on the Palm Protocol, an energy-efficient Ethereum sidechain.
Social media peer Twitter launched a tool that allows users to showcase NFTs as their profile pictures. The new tool designed by Twitter connects users’ Twitter accounts with their crypto wallets holding the NFTs.
Twitter is exploring the crypto universe and supporting NFT trading. Artists can use the platform to connect their crypto wallets and take payments directly through Twitter. They can also take tips in cryptocurrencies like Bitcoin and Ethereum through crypto wallet apps.
Zacks Rank & Stock to Consider
In the year-to-date period, Meta shares which carry a Zacks Rank #4 (Sell) have tumbled 35.4% compared with the Zacks Internet – Software industry's and the Zacks Computer and Technology sector's declines of 33.1% and 16.6%, respectively.
The current economic turmoil has resulted in the financial markets being extremely volatile. In order to stabilize your portfolio against uncertainties, you can consider the following stock.
America Movil (AMX - Free Report) currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
AMX shares have returned 4.2% in the year-to-date period compared with the Zacks Wireless Non-US industry's growth of 7.6%.