Gabriela de Ávila Machado
Lawyer at Marcos Martins Advogados
On July 9, 2020, the Central Bank (BC) launched a Public Consultation on proposed changes to the regulation of payment institutions. This is another measure linked to the Open Banking agenda and suggestions and comments can be received until August 8th.
One of the proposed changes refers to the waiver of the requirement for prior authorization by fintechs such as Sociedade de Crédito Direto (SCD) that provide services as issuers of post-paid payment instruments. Another is the requirement for payment institutions issuing electronic money to request authorization to operate from the Central Bank before starting their activities. This would be a way of standardizing the rules for access to the payment system
Lastly, and most prominently, are the rules on payment transaction initiators. This agent is important for the operation of Open Banking in Brazil and must be an institution authorized to operate by the Central Bank.
With the payment transaction initiator, the idea is for the consumer to give an order for the institution where they have an account to make the payment, without the need to access the institution’s application, with a debit from their deposit or payment account, even if they don’t use a card.
The hypothetical example given by the Central Bank is that of paying for food ordered through the restaurant app. In a traditional payment, the customer would have to go to the app of the institution where they have an account to pay or use the card. With the new payment transaction initiator institution, the same restaurant app will be able to connect him to a single payment transaction initiator and he will be able to order the institution with which he has an account to transfer the funds to the restaurant’s account.
Contributions to the Public Consultation can be made at this link.
See our article on Open Banking and data protection here.
