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The Central Bank of Brazil carried out public consultation number 78/2020 with the aim of harmonizing the prudential treatment applicable to payment systems, regardless of whether they are carried out by payment institutions or by financial institutions. The new rules, which are likely to take effect soon, are expected to increase fintech requirements.

The proposal submitted to public consultation (which has already been closed) divides the institutions into three large groups: (i) controlled by a financial institution; (ii) controlled by a payment institution (IP) and not integrated by a financial institution; and (iii) controlled by IP, but integrated by a financial institution.

The second category, for example, in which several fintechs are part of, suggests a significant capital requirement of 2% (two percent) to 4.5% (four and a half percent), based on the profile of each entity, which is established according to parameters such as assets and volume of transactions.

The Central Bank of Brazil has not yet disclosed how it will implement the new rules based on the responses received through the public consultation. The discussion about the regulatory asymmetry between banks and fintechs, however, is quite current in this sector in Brazil.

The Central Bank of Brazil attitude follows the criteria of regulatory proportionality, in the sense that stricter requirements should be imposed based on the size of the institution and the respective risk it presents to the system, thus aiming to be a proportional regulation, with the intention of harmonizing the applicable rules.