This week marks the beginning of Phase 3 of Brazil’s embrace of open banking. Phase 3 is the second-to-last stage of the implementation plan set out by the Brazilian Central Bank. According to reports, Phase 3 arrives about one month late – the original date was September 30th – but the changes that the newest phase of the open banking initiative will bring are significant enough to be worth the wait.
Divided into four parts, the goal of Phase 3 is to usher in the regulation of payment initiation from any online platform. This will initially involve enabling consumers to pay for products and services using PIX – without the consumer having to use their bank’s app. PIX is the smartphone-based, instant payments technology launched by the Brazilian central bank almost a year ago. The second part of Phase 3, enabling payments made with TED (transferência eletrônica disponível) and transfers between accounts of the same bank, is set to begin in mid-February of 2022; the third part, enabling payments via bank slip, is slated to begin in late June; and the fourth and final part of Phase 3, enabling payment by debit account, is set to go live at the end of September.
Payment initiation is only one component of the open banking project Brazil has undertaken. Giving consumers the ability to make price comparisons, as well as compare rates and credit offers, are also major new possibilities for consumers that will be available thanks to the introduction of open banking in the country. These elements are expected to begin at the end of March 2022.
“The initiation will have a great impact especially on fintechs, which may offer more practical solutions for consumers or improve your internal financial processes from direct payment,” Belvo General Director Albert Morales explained. “Large banks, on the other hand, should start to rethink prices and solutions offered, both to attract new users and to retain users.”
Brazil’s open banking project, approved in 2019 by the country’s central bank, is part of a larger modernization effort for the Brazil’s entire financial system. And while the global pandemic has played a major role in complicating the project’s original timeline, officials expect open banking to be fully implemented in the country by September of next year.
Read more about Brazil’s open banking project in this interview with Otávio Damaso, Regulation Director for Brazil’s central bank, conducted by The Paypers last month. Damaso explains why Brazil has embraced open banking, and how open banking fits into the larger context of regulatory changes and trends in the country.
Here is our look at fintech innovation around the world.
- Africa’s largest bank by assets, Standard Bank, and African payments company Flutterwave collaborate to enhance digital payments in Nigeria, Zambia, and six other African countries.
- South African fintech Stitch announced an expansion into Nigeria and a $2 million seed round extension investment.
- Zambian fintech Union54 secured an investment of $3 million in a round led by Tiger Global.
Central and Eastern Europe
- German B2B, Buy Now Pay Later solution provider Billie secured $100 million in Series C funding, earning a valuation of $640 million.
- Latvian loan management system FIS teamed up with Money.Jo (Money for Finance) to help bring new lending options to consumers in Jordan.
- Paysafe announced a partnership with Hungary-based mobile development company Bitrise.
Middle East and Northern Africa
- Dibsy, a payment service provider based in Qatar, integrated Apple Pay for online purchases.
- Israeli fintech Futora secured $6 million in funding to support its personal investment solutions for HNW individuals.
- Saudi Arabian money management company Tweeq announced partnership with French augmented identity company IDEMIA.
Central and Southern Asia
- Indian investment platform Groww earned a valuation of $3 billion after picking up $251 million in funding.
- Pakistan-based mobile account provider JazzCash partnered with Mastercard to power innovation in the country’s digital payment ecosystem with a new virtual debit card offering.
- Indian SaaS fintech Clear (formerly ClearTax) picked up $75 million in Series C funding.
Latin America and the Caribbean
- Brazilian payments company Hash raised $40 million in Series C funding in a round led by QED Investors and Kaszek.
- Latin American payment solutions provider Ebanx finalized its acquisition of Brazilian B2B payments firm Juno.
- Sao Paulo-based Nubank, the largest fintech bank in Latin America, filed for an IPO in the U.S. this week.
- Payoneer announced a collaboration with South Korean ecommerce platform Coupang.
- Netbank, a banking-as-a-service fintech based in the Philippines, partnered with Chekk for KYC and KYB services.
- Malaysia-based Touch ‘n Go Group makers of the Touch ‘n Go eWallet, entered into a strategic partnership with Visa.