Brazil’s Central Bank simplifies opening accounts in fintechs

RIO DE JANEIRO, BRAZIL – The Central Bank on Wednesday, May 19, issued a regulation easing the opening and closing of payment accounts, typically offered by fintechs.

With the change, institutions will no longer be required to maintain a list of registration information and will be able to choose which data the client needs to provide when opening an account.

This type of account offers basic services such as payments and fund transfers. The difference from a bank current or checking account is that it does not necessarily need to be managed by a bank, and funds deposited may not be used in credit operations.

The money deposited in checking accounts can be used by the bank for loans to other clients. In addition, the payment account can not be used for check transactions.

Payment accounts can be either prepaid, where clients deposit the money before use, or postpaid, which works like a kind of credit card. These services are offered by payment institutions, which are typically fintechs.

The resolution allows these accounts to be opened and closed electronically or through any service channel provided by the institution.

In addition, the institution may not refuse to close the account based only on an overdue balance or unpaid installments.

The new rule also enforces the inclusion of information on the statement of the post-paid account (similar to a credit card), such as the total balance of purchases in installments and fees charged.

According to a note from the Central Bank, the rule also “makes it mandatory to forward or provide the holder, physically or electronically, the credit card and its statements and invoices, according to the form and channel chosen by the holder among the options provided by the institution.”

According to the text, the change is based on the digitalization of payment methods and the main goal is to ensure that the regulation does not become an obstacle to the emergence of innovative financial services “that could be beneficial to the Brazilian population.”