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The Central Bank of Brazil (BCB) is ready to cap interchange charges for pay as you go playing cards beginning in April 2023, and it’ll additionally standardize the settlement time period for debit and pay as you go card transactions.

Reuters reported Monday (Sept. 26) that the restrict can be 0.7% for interchange charges for pay as you go playing cards. The BCB stated the modifications are anticipated to “increase the efficiency of the payments ecosystem, encourage the use of cheaper payment instruments, enabling the reduction of costs for stores to accept these cards.”

See additionally: From Film Studios to FinTechs, Connected Economy Forces Business Model Rethinks

The central financial institution put the problem out for public session final yr, however the suggestions got here again with a instructed cap of 0.5% for each debit and pay as you go playing cards, a change that might have been extra of an upset to FinTechs than the present 0.7%.

Interchange charges for debit playing cards at the moment are from a joint weighted common calculation of 0.5% and a most worth per transaction of 0.8%, Reuters reported. Under the revisions by the BCB, debit card interchange charges will now be capped solely by 0.5% per transaction.

Read extra: Brazil’s Central Bank Head Says Pix Instant Payments Will Replace Credit Cards

Banks in Brazil had been asking the BCB to stage the sector by setting a restrict for interchange charges for pay as you go playing cards. The rise in FinTechs working with out price caps gave them an unfair benefit, per the report.

Brazilian FinTech Nubank advised Reuters that 7% of its income within the yr to June 30 got here from interchange charges on pay as you go playing cards. If the cap had been in impact, the challenger financial institution’s income would have been affected by 2.9%, Nubank stated.

Nubank shares had been down 2.3% in noon buying and selling when the information broke in regards to the price caps, in keeping with the report. Shares of Brazilian funds firm PagSeguro Digital fell 9.5%, and Inter & Cofell was down 9.8%.

New PYMNTS Study: How Consumers Use Digital Banks

A PYMNTS survey of two,124 US shoppers exhibits that whereas two-thirds of shoppers have used FinTechs for some facet of banking companies, simply 9.3% name them their main financial institution.

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https://www.pymnts.com/credit-cards/2022/borrowing-is-back-credit-card-companies-say/partial/

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