Central Bank blocks WhatsApp payment system

— a peer-to-peer transfer system that <a href="https://brazilian.report/tech/2020/06/16/how-disruptive-will-whatsapp-pay-be-in-brazil/">launched just last week</a>–– which allows users to send money via the popular instant messaging app. It ordered Visa and Mastercard to halt payments as it wants to further scrutinize the service before giving its authorization. In a statement, the bank said that allowing the service without examination could jeopardize Brazil&#8217;s payment systems in three areas: competition, efficiency, and data privacy.</p> <ul><li>Meanwhile, antitrust watchdog Cade suspended WhatsApp&#8217;s deal with the banks that would process the payments during its initial phase (Nubank, Banco do Brasil, and Sicredi).</li></ul> <p><strong>Why it matters. </strong>Banks reportedly <a href="https://www1.folha.uol.com.br/mercado/2020/06/itau-bradesco-e-santander-se-queixam-ao-bc-sobre-pagamento-pelo-whastapp.shtml">complained</a> to the monetary authority about the possible threats raised by WhatsApp Pay, namely market concentration and data privacy. The messaging app has over 120 million monthly users in Brazil.</p> <ul><li>In recent years, Facebook (WhatsApp&#8217;s parent company) has faced heat over its handling of users’ private data in scandals such as the <a href="https://www.nytimes.com/2018/03/17/us/politics/cambridge-analytica-trump-campaign.html">Cambridge Analytica affair</a> (in which a political consulting firm accessed private data of 87 million users) or the <a href="https://www.nytimes.com/2018/09/28/technology/facebook-hack-data-breach.html">2018 hacking attack</a> that exposed the personal information of nearly 50 million users.&nbsp;</li></ul> <p><strong>Setbacks.</strong> Last year, Facebook CEO Mark Zuckerberg announced a new cryptocurrency, Libra, which bombed after meeting resistance from regulators. The company has also struggled to set up a payment system in India, the biggest market for WhatsApp.</p> <p><strong>Mobile banking.</strong> In 2019, 44 percent of all bank transactions in Brazil were made through smartphones. Now, the pandemic is only accelerating users&#8217; migration to digital platforms. Experts believe that the instant payments industry has the potential to reach 20 million users in its first year. WhatsApp Pay could have been a good test of these predictions.</p> <ul><li>Banks&#8217; spending on tech has risen by 24 percent last year, according to an annual survey by the Brazilian Federation of Banks (Febraban) and Deloitte.</li></ul> <div class="flourish-embed flourish-chart" data-src="visualisation/2958468" data-url="https://flo.uri.sh/visualisation/2958468/embed"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <hr class="wp-block-separator"/> <h2>Senate postpones 2020 election, but the House is not convinced</h2> <p>Senators passed a constitutional amendment yesterday to postpone the 2020 municipal elections. Instead of the original dates, October 4 and 25 (for the first round and runoff stage, respectively), the vote would be pushed back to November 15 and 29.</p> <p><strong>Why it matters.</strong> The pandemic has already disrupted the 2020 election cycle. Candidates will <a href="https://brazilian.report/power/2020/06/22/brazil-about-to-have-its-most-digital-political-campaign-ever/">not be able to stage regular meet-and-greet campaigns</a>. And it is still unclear how —&nbsp;or even when —&nbsp;the vote will take place.</p> <p><strong>What comes next. </strong>Now, the bill moves on to the House, where consensus will be significantly harder to build. The two main proposals among representatives are: (1) keeping the regular calendar as it is; or (2) pushing the election to 2022 to coincide with the national races. Each solution is extremely problematic in its own way.</p> <ul><li>There is no guarantee that the pandemic will be under control by October (more below) —&nbsp;and Brazil&#8217;s electoral system is, by design, a health hazard in coronavirus times. Voters stand in line for several minutes (sometimes hours) and touch the same electronic voting machine.</li><li>Pushing the election to 2022 would grant incumbents two extra years in office. House Speaker Rodrigo Maia claims this would set a dangerous precedent, and future rulers could use emergency situations to perpetuate themselves in power.</li></ul> <div id="buzzsprout-player-4224614"></div> <script src="https://www.buzzsprout.com/299876/4224614-113-covid-19-made-brazilian-elections-more-exposed-to-fake-news.js?container_id=buzzsprout-player-4224614&#038;player=small" type="text/javascript" charset="utf-8"></script> <hr class="wp-block-separator"/> <h2>Four months later, government pushes for mass testing</h2> <p>Interim Health Minister Eduardo Pazuello promised to unveil a new program for mass Covid-19 testing in the country later today. He claims the new initiative will test up to 24 percent of the population (over 52 million people). The move comes nearly four full months after the first infection was confirmed in Brazil.</p> <p><strong>Why it matters.</strong> According to data aggregating platform World-o-meters, Brazil has performed fewer tests per 1 million people than any other country among the top 10 countries with most infections — except for India, which has a population of 1.3 billion. And despite limited testing, Brazil is registering more new infections and deaths per day than any other country.&nbsp;</p> <ul><li>An inquiry by the São Paulo City Hall helps understand the magnitude of Brazil&#8217;s coronavirus underreporting. It suggests that the city alone could have over 1.2 million cases —&nbsp;that&#8217;s more than the tally for the entire country.</li></ul> <p><strong>Reopening.</strong> The World Health Organization established six criteria that regions and countries should comply with in order to ensure a safe reopening of businesses and local economies. Brazil barely meets any of them, and still, many states have begun returning to work as normal. And the number of infections is jumping fast. In the city of Curitiba, for instance, cases have tripled in less than a month.</p> <div class="flourish-embed flourish-chart" data-src="visualisation/2641109" data-url="https://flo.uri.sh/visualisation/2641109/embed"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <div class="flourish-embed flourish-chart" data-src="visualisation/2641192" data-url="https://flo.uri.sh/visualisation/2641192/embed"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <hr class="wp-block-separator"/> <h2>What else you need to know today</h2> <ul><li><strong>Sanitation.</strong> Today, the Senate is expected to pass the new legal framework for sanitation services in Brazil, allowing private companies to enter the market and setting goals for the universalization of sewage services. The government expects the new regulations to create 1 million jobs over the next five years and attract <a href="https://brazilian.report/newsletters/brazil-daily/2020/06/02/brazil-government-turns-to-sanitation-overhaul-to-kickstart-economy/">BRL 700 billion in investments</a>. A survey by BMJ Consultores suggests that 48 out of 81 senators are in favor of the bill, with another six listed as &#8220;possibly in favor.&#8221; That would give the government a comfortable victory, as only 41 votes are required for approval.</li><li><strong>São João.</strong> June 24 is the feast day of Saint John the Baptist, or, as Brazilians call it, Dia do São João. For the Northeast region, the date is one of the most important of the year. The reason? &#8220;<a href="https://brazilian.report/power/2019/06/23/sao-joao-brazil-congress-festa-junina/">Festa Junina</a>,&#8221; Brazil’s annual harvest festivals, which see huge parties in towns and villages around the region. It is also <em>the</em> meet-and-greet event for local politicians and skipping Festa Junina parties is akin to electoral suicide. The suspension of festivities due to Covid-19 should result in BRL 1 billion in losses for the Northeast region (considering only the major festivals). The impacts are much broader, however, as it impacts several sectors that cash in at this time of the year — such as transportation, food and beverage, hospitality, and even fireworks.</li><li><strong>Agribusiness 1.</strong> At the request of Chinese authorities, meat processing giants JBS, BRF, Minerva, and Marfrig have signed declarations saying their exports are coronavirus-free. BRF, the world&#8217;s leading poultry exporter, added that there is no evidence of Covid-19 transmission via food. As in many countries, Brazil&#8217;s slaughterhouses have become <a href="https://brazilian.report/business/2020/05/30/role-meat-plants-coronavirus-spread-brazil-countryside/">breeding grounds for the virus</a> due to how they are designed (closed, refrigerated spaces where hundreds, sometimes thousands, of people work shoulder to shoulder).</li><li><strong>Agribusiness 2.</strong> Authorities are monitoring a locust cloud which has entered Argentina from Paraguay and is now approaching the southern Brazilian border. &#8220;If the cloud persists and meteorological conditions allow, it could affect crops and pastures,&#8221; said an official from southernmost state Rio Grande do Sul.</li><li><strong>Culture. </strong>With no fanfare whatsoever, former teen actor Mario Frias has been inaugurated as Brazil&#8217;s new Culture Secretary, making him the fifth incumbent of the role in 17 months. His last two predecessors became notable for <a href="https://brazilian.report/power/2020/01/17/brazilian-culture-secretary-roberto-alvim-goebbels-nazi/">paraphrasing Nazi Propaganda Minister Joseph Goebbels</a> — in the case of theater director Roberto Alvim — and playing down Brazil&#8217;s history of state-sponsored torture, in the case of actress Regina Duarte.