Facebook threatens Banco Santander in its main market with the launch of payment by WhatsApp in Brazil

The fears of Ana Botín and José Antonio Álvarez have come true. The president and CEO of Banco Santander have regretted on many occasions that the big technology companies or Bigtechs (Amazon, Google, Facebook, Microsoft, among others) are daring to enter spaces that have been previously owned by the banking sector without regulators doing nothing to stop it. Now, Santander has the enemy already at home, and in the most important market for the bank for benefits: Brazil. This second fortnight of June, the WhatsApp payment model is being implemented and launched for the first time in the American country. But just on the same day that the new service was launched, Banco Santander, along with Bradesco and Itaú, three of the country’s main banks, went to complain to Banco de Brasil for allowing this service at this time, as reported the Brazilian press. The reason they argued was that it was a difficult time to implement this new payment technology in the midst of the coronavirus pandemic that continues to plague the Portuguese-speaking country with 1.3 million infections certified by PCR tests and 57,774 deaths with data from this Monday. . Santander and other major banks in Brazil tried to “stop the project” of payment for WhatsApp in Brazil, according to the local press. However, other information cited by the ‘Financial Times’ this same weekend assure that what Santander and the rest of Important banks in Brazil tried to “stop the project” because they did not have their competition. They had tried to participate in the tests for the payment by WhatsApp but they did not have the ability to do so within the expected deadlines. According to this medium, the big bank thought that Facebook would not launch the project without them but now it has been seen that Californians push forward and do not wait for them. Banco Santander has responded to OKDIARIO that “it is still evaluating the possibility of using WhatsApp in payments” while Itaú and Bradesco ruled out that they would participate for the time being. Too important The Brazilian market is too important for the entity of Ana Botín to miss such a move. The immediate potential is to attract 51 million customers out of the approximately 120 who use the instant messaging application. According to Facebook, the system would allow transfers between telephone numbers at no cost, while a bank transfer between different entities has a cost of 10 Brazilian reals (1.64 euros). The other option would be the Whatsapp Business model, intended for merchants. This free model dedicated to brands has a cost of 3.99% of the transaction that the merchant would pay. The daily transaction limit would be 1,000 Brazilian reals (164 euros) and a maximum of 20 transactions can be made per day. All these functions make it very important for Banco Santander to be able to participate in this type of new services. The entity continues to leave the possibility of participating in this new service in the air. Santander already collaborates with electronic payment methods, such as the successful Bizum in Spain. Under pressure from classic financial institutions, the Bank of Brazil has indicated that it will not allow a concentration of these payment methods to be concentrated in a single agent, in what has been understood as a message to Facebook. But since the entire payment scheme would go through Facebook Pay, it would be necessary to create an account for those who do not have it and want to operate. First market Banco Santander Brasil is by far the division of the multinational that generates the most benefits for the group. In 2019, 28% of ordinary profit came from the country, followed by Spain (15%), its global consumer subsidiary Santander Consumer Finance (13%), the United Kingdom (11%), Mexico (9%), the United States ( 7%) and Chile (6%). The interest margin in Brazil in the first quarter was 2,270 million euros, well above its second market in benefits, which is not Spain but the United States, with 1,472 million euros. Tax rise Ana Botín did not waste the press conference after the presentation of results in 2019, in January of this year, to charge against the great technology companies that, according to her, should be taxed fairly for the activities they do. The European Union has spent a long time looking for ways that US multinationals do not take advantage of tax engineering to avoid tax collaboration. “With the change of economic model, business models have also changed, many take advantage of a structure that is not designed for the digital age,” said the Madrid directive, who asked “to design a model where taxes are paid where value is generated” . These increases in tax burdens would establish a more valid ecosystem to compete.