Friday Briefing: Brazilian fintechs get boost from regulator

November 25, 2022

#TopStory 🔝

Brazil eases key requirements for fintechs

Brazil took fresh steps this week to strengthen its fintech ecosystem, the largest in the region. The Central Bank (BCB) relaxed deadlines for some startups to raise their prudential capital while making it easier for them to obtain a license, in a sign it is willing to accommodate new business models that display vigorous growth.

The deadline for the largest fintechs to increase capital was pushed back by six months. The BCB also gave some payment institutions (IP) more time to apply for an operating license. They will now have until 2029 to complete the process — a postponement of six years — depending on the size of their operation.

In both cases, the big winners will be the smaller fintechs, which will continue to operate with simplified requirements. And as for the largest companies, such as Nubank, Stone, PagSeguro and Mercado Pago, they’ve won more time to meet operating
requirements, although they will have to gradually increase their capital.

“They have become very large players that incorporate different financial activities and are beginning to offer products and services that are increasingly similar to those of banks,” Bruno Diniz, managing partner of  Brazilian innovation consultancy Spiralem, tells iupanaPro.

At the same time, the BCB also approved the use of of Visa
cards for purchases via WhatsApp, a step towards freeing up the use of plastic on the application. Meta last week launched a new functionality for buying and making payments using the platform.

For Diniz, these movements are “inevitable and a reflection of how the fintech ecosystem has matured in recent years.”

#Financial results💰

Stone ends Q3 with satisfactory results

Brazilian payment fintech Stone reported a net profit of R$162.5 million (US$30.5 million) in the third quarter, an increase of more than 90% from the same period last year. The company also saw its customer base increase 70.9%. Stone says digital revenues increased by 10%, boosted by its acquisition of Plugg.To, a market integration center.

PagSeguro reports record
profit

PagBank said it cemented its position as Brazil’s second-biggest neobank after registering its highest-ever  net profit during the first nine months of the year and reaching 16 million active users. In terms of financial services, PagBank’s net billing grew 58% year-on-year, while the total volume processed by its payments division, PagSeguro, increased 50%.

#Strategic Plays 📊

Nubank launches savings accounts in Mexico

Nubank presented its waiting list for customers wanting to open a savings account in Mexico. The account, called Cuentas Nu, expands the neobank’s digital financial offering in the country, where it has positioned itself as the largest issuer of credit cards.

Mercado Pago launches prepaid card in Chile

Mercado Pago introduced physical and virtual prepaid cards as part of an alliance with MasterCard. The product complements the digital account already available to Chilean clients.

Also…

• Brazil’s CloudWalk launches InfiniteBank, its digital lender for SMEs, after obtaining authorization to operate as a payment institution.
• Brazilian fintech Fretebras presents a rewards program with rebates for truckers who buy fuel at partner filling stations.

#Investments 📈

Trii closes investment round for US$3m

Colombian wealthtech Trii raised US$3 million in financing from Bancolombia. The capital will be used for product development.

#People 🫂

Nu Mexico names CEO

Nubank said Iván Canales has become CEO in Mexico, having previously led its product area. Earlier this year, we spoke to his predecessor, Emilio González, who has now moved to a regional position.

CredibanCo appoints new president

Ricardo Zambrano Ahumada is the new interim president of CredibanCo in Colombia. The lender aims to accelerate the digitalization of payments and promote the interoperability of the entire ecosystem.

#iupanaExclusive 🔥

With all the hustle and bustle in the crypto world, it’s impossible to wonder how the crash in virtual assets will impact the development of blockchain products. But Reinaldo Rabelo, CEO of the Brazilian exchange Mercado Bitcoin, believes the crypto ecosystem is maturing, and investments are no longer the axis. Highlights of this exclusive interview with iupana include:

• Mercado Bitcoin sees a plethora of opportunities for growing the crypto ecosystem despite this year’s collapse in company valuations and investments.
• The company is waiting for a license
  to operate as a payment institution in Brazil.
• Mercado Bitcoin wants to evolve its business model and offer traditional products with a crypto twist.

Learn about the exchange’s regional and product expansion plans in this week’s iupanaExclusive.