Whatsapp’s problematic Brazilian ‘monopoly’

In Brazil, Whatsapp’s omnipresence has given rise to the app’s expansion, but has the service bitten off more than it can chew?

This week, Whatsapp Brazil rolled out a digital payment system to allow users to send money to other individuals or businesses in their contact list.

The instant messaging service, which is owned by Facebook Inc., has approximately 120 million users — over half the Brazilian population of 210 million people. Brazil has the second-largest Whatsapp user base in the world, behind India.

According to data published by Statista, 91% of users who downloaded the app claimed to use it all day, with just two percent claiming to use it a few times per week.

“The monopoly of a super app is in itself concerning. We depend on it. Our lives don’t happen without it” — Jacqueline Lafloufa

From a corporate perspective, “Brazil is the perfect place” to trail the new payment feature, Brazilian technology journalist Jacqueline Lafloufa told The Sociable. 

“It’s what was missing,” she added, as we spoke — via Whatsapp.

“People in Brazil use Whatsapp for absolutely everything,” explained Lafloufa, from keeping in contact with family and friends, to doing business, for education, to order food, to build communities, to offer security and even help with transport.

During the COVID-19 pandemic, its ubiquity has become even more evident, she added.

“Whatsapp is our super app,” she claimed, likening the messaging service to a less-organized version of China’s WeChat.

Whatsapp alarm bells in Brazil

But for Lafloufa, Whatsapp’s power could at the same time be its biggest pitfall.

“The monopoly of a super app is in itself concerning,” she said. “We depend on it. Our lives don’t happen without it.”

“What happens if this tool stops working?” she asked, referencing a 2016 incident when a Brazilian judge ordered phone operators to block the chat service for 72 hours, because of “disrespect for Brazilian law.” The same thing happened just a year before.

Whatsapp’s potential to fail users has been exposed when the service has attempted to expand its features before.

The launch of Whatsapp’s digital payment service in India in 2018, for example, was met with problems from the outset.

In February this year, a local think tank CASC filed a lawsuit against Whatsapp Pay India, accusing the service of failing to “secure the sensitive data of its users.” The petition was heard in May and the case is still ongoing.

Naturally, its launch of the same service in Brazil raises similar sounding alarm bells.

Speaking on Brazilian radio network CBN, tech journalist Thássius Veloso pointed out the existing security problem of ‘account takeovers’ on Brazilian Whatsapp.

This form of identity theft — a mixture of phishing and social engineering — involves fraudsters who pretend they are confirming data by sending an authentication code via SMS which the receiving user must confirm.

Once confirmed, the fraudsters can take control of the user’s Whatsapp account and message their personal contacts to pose as a friend asking for loans of money.

“Brazil is particularly vulnerable to these attacks,” echoed Lafloufa, pointing out the potential for them to worsen under the guise of Whatsapp Pay.

If this problem already exists, warned tech journalist Lafloufa, “imagine when this exchange of money can take place via the [Whatsapp] application itself.”

Although Whatsapp Pay claims to protect the security of its users by using anti-fraud technology to monitor all payments, “will the service be responsible for covering the costs of the data theft?” she asked.

How did Whatsapp become so popular in Brazil?

According to anthropologist Rafael Evangelista of Brazil’s Unicamp University, Whatsapp’s rise to popularity began around five years ago when Brazilian mobile phone networks Oi, Claro and Tim started partnering up with the messaging service to offer it for free as part of paid phone plans, on an often unlimited basis.

“Whatsapp is almost like a television channel” — Rafael Evangelista

With this, he explained to The Sociable — also via a phonecall on Whatsapp — groups started forming on the app, which users would pay a small fee to join in order to access content that was being shared across them in various multimedia formats.

“It’s almost like a television channel,” he said, explaining how the app went from a messaging service to a social media platform. “And Brazil really likes social media.”

The content, which is often shared in the form of videos, audios and images was, and continues to be, popular among those Brazilians who struggle to read, added Evangelista, which he says drove the massification of the app.

According to 2018 data from the Brazilian Institute of Geography and Statistics (IBGE), 6.8% of the Brazilian population aged over 15 is illiterate. This equates to 11.3 million people.

A vehicle for content distribution

Through its mass popularization, anthropologist Evangelista claims that Whatsapp has become a “central part” of an “ecosystem” of production of sensationalist and sometimes fake news in Brazil.

“The [hypothetical] menu of information in Brazil was already not very good,” said Evangelista, who explained that Brazilian media has historically been concentrated in the hands of a few powerful families groups who control the country’s TV, radio stations, newspapers and magazines.

And as traditional Brazilian media outlets began to lose strength, he explained, Whatsapp became a major vehicle for the distribution of news content — produced by Youtube channels and alternative news sites — that attracted engagement for different reasons.

This content, which Evangelista explained often ends up going viral because of its sensationalist nature, is “almost always” sympathetic to “far-right political leaning.”

For him, this became evident during the 2018 election campaign of far-right President Jair Bolsonaro, during which Whatsapp became a minefield for the spread of sensationalist and false information.

And, unlike its owner Facebook, Whatsapp is limited in its ability to monitor information being shared by users or groups without infringing on their privacy.

“Its closed, encrypted architecture … restricts visibility for researchers and public authorities,” Evangelista wrote in a 2019 paper on Whatsapp and political instability in Brazil.

‘More than just a messaging app?’

Whatsapp has become an integral part of Brazilian culture, so much so that some believe it even played a role in the election of the country’s current president.

In February this year, Whatsapp launched its first major advertising campaign in Brazil to play on this strength.

The eight-minute video broadcasts the message that the service is “more than just a messaging app,” showing how it plays a major role in the life of Brazilians.

But for Lafloufa, “Whatsapp is just an instant messaging system.”

And, ultimately, it lacks the infrastructure to be anything more.