Brazil to allow credit fintechs to initiate payment transactions

Brazil's National Monetary Council on Friday decided to allow credit fintechs to initiate payment transactions, the central bank said, a move that will in practice clear them to provide payment services to consumers and business establishments.

To operate as payment initiators, fintechs currently need to open another company specifically for this purpose. With the change, they will be able to offer this service within their routine operation, said the central bank.

Payment initiators, according to the central bank, "initiate a transaction ordered by the final user but never manage the payment account, nor hold the funds of the transactions."

The central bank stressed that the change should promote innovations in the financial system and increase competition between companies authorized to provide this service.