The cell phone has changed the world when it brought communication to those in the world who could never either afford or be able to receive a land line phone. That is a very good thing for the world. The smart phone brought apps which makes the smartphone a mini computer. Apps bring disruption and can be monetized to make money for many companies. If enough people use the app, then profits roll in. Facebook bought WhatsApp and is combining it with Messenger to bring in even more revenues. The theory is it all works, until technology runs into governments who like to control things.

In an article be Carolina Mandl and Marcela Ayres of the Associated Press, Facebook which is looking to add revenues outside of North America looked at Brazil and India and saw dollar signs. Both countries have a large middle income group who are dependent on cellphones. If a country is dependent, then it needs Apps and Facebook wanted to supply Brazil with Apps through the WhatsApp payment service.

In Brazil, payments is a $454 billion in card services and Facebook wanted WhatsApp to help move money around, then came the Central Bank President Roberto Campos who said shut the service down. The backstory is Facebook has spent years on trying to make money in Brazil saw a golden opportunity to use WhatsApp to move money at a fee. The problem is according to President Campos, Facebook talked about the idea, but never brought a proposal to the bank and the regulators had not figured out how to regulate Facebook’s operations.

Facebook was trying to avoid setting up as financial services company and was using VISA and Mastercard wires to carry out the transfers. VISA’s Brazil President Fernando Teles said WhatsApp approached him 2 years ago and they had been working together. VISA did not get a license for WhatsApp because they and Mastercard are already licensed.

Facebook thought they had a backdoor entry because there is a provision in the rules, small companies can start and operate if they have under 25 million transactions in a 12 month period. The Central Bank said this was to encourage small companies to enter the market, not giants like Facebook.

Facebook would be free to users, but merchants would be charged a fee.

Facebook is working with anyone who can ensure the payment system goes into operation.

Linking to dividend paying stocks, similar to everything in life, communication is the key. Communication with the stakeholders, the regulators and the public. Only seeing the potential market and trying to secure a percentage of it loses a great deal of money on the venture stock exchange. Often we believe, in a case like Facebook and Brazil, Facebook would have the operational advantage, the advantage of resources and the advantage of time. Perhaps someone rushed or assumed too much in the pursuit of the golden goose.

There are more questions than answers, till the next time – to raising questions.