Brazil’s Central Bank Is Trying To Open Up The Cards Market

The Central Bank of Brazil has changed the rules which govern the existence of closed “payment arrangements”. Currently, these arrangements mean that certain cards are only accepted on certain devices/POS.

Examples of closed arrangements are American Express and ELO which can be only processed through Cielo and Hiper/Hipercard which can only be processed through Rede. Both acquirers have 80%+ market share.

Now the Central Bank of Brazil, which acts as the main regulator, has ruled that closed “payments arrangements” can only exist if the annual processing volume is less than R$20 billion. The sector has 180 days to implement the necessary changes.

Pilot projects are already underway to allow POS to process all schemes, at over 200,000 further locations, to accept both the Amex, ELO and Hiper cards.

Those companies whose processing volume is over R$20 billion will have to submit themselves to the new rules. This means that the new acquirers will also be able to process all schemes through their own POS devices.

The regulator says the new rules are designed to increase competition.

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References: Valor Econômico

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