On November 16, 2022, the Brazilian Central Bank ("BCB") issued Resolution No. 257 ("BCB Resolution 257"), which amended Resolution No. 80/2021 ("BCB Resolution 80"), to extend the timeline for the request for authorization for payment institutions to begin providing payment services as electronic currency issuers that were incorporated and in operation by March 1, 2021.
Since the enactment of BCB Resolution 80, which regulates the formation and operation of payment institutions, it became mandatory for all payment institutions to apply for authorization to start providing payment services as an electronic money issuer.
However, for payment institutions that began providing electronic currency issuer services before March 1, 2021, and have not yet obtained authorization from the BCB, BCB Resolution 80 established a schedule for those payment institutions to apply for the authorization considering specific parameters (volume of payment transactions and funds held in prepaid accounts), whose deadline was March 31, 2023.
Nevertheless, due to the expansion of the market and the large number of authorization processes for payment institutions, the initial authorization schedule established by BCB Resolution 80 proved to be insufficient, resulting in 90 (ninety) accumulated requests and an expectation of 170 (one hundred and seventy) new requests for the year 2023.
Therefore, to guarantee legal certainty and transparency to those interested in applying for an authorization, the BCB has edited Resolution BCB 257, with the purpose of extending the schedule and modifying the parameters for payment institutions to apply for authorization, extending the deadline by 6 (six) years, with an end date of March 31, 2029. Check below the new schedule and applicable parameters:
- From January 01, 2022 to December 31, 2024, financial transactions exceeding at least one of the following amounts: (a) R$300,000,000.00 (three hundred million Brazilian reais) in payment transactions; or (b) R$30,000,000.00 (thirty million Brazilian reais) in funds held in a prepaid payment account;
- From January 01, 2025 to December 31, 2025, financial transactions exceeding at least one of the following amounts: (a) R$250,000,000.00 (two hundred and fifty million Brazilian reais) in payment transactions; or (b) R$25,000,000.00 (twenty-five million Brazilian reais) in funds held in a prepaid payment account;
- From January 01, 2026 to December 31, 2026, financial transactions exceeding at least one of the following amounts: (a) R$200,000,000.00 (two hundred million reais) in payment transactions; or (b) R$20,000,000.00 (twenty million Brazilian reais) in funds held in a prepaid payment account;
- From January 01, 2027 to December 31, 2027, financial transactions exceeding at least one of the following amounts: (a) R$150,000,000.00 (one hundred and fifty million Brazilian reais) in payment transactions; or (b) R$15,000,000.00 (fifteen million Brazilian reais) in funds held in a prepaid payment account;
- From January 01, 2028 to December 31, 2028, financial transactions exceeding at least one of the following amounts: (a) R$100,000,000.00 (one hundred million Brazilian reais) in payment transactions; or (b) R$10,000,000.00 (ten million Brazilian reais) in funds held in a prepaid payment account; and
- By March 31, 2029, in the event that the amounts provided for in the previous items are not reached.
According to the new schedule, the application for authorization must be submitted by the payment institutions within ninety (90) days after reaching any of the limits described above; or if none of the limits is reached, until March 31, 2029.
Finally, it is worth mentioning one other relevant change promoted by BCB Resolution 257: the exemption of direct credit companies ("SCD"); inter-personal loan companies ("SEP"); and credit companies to small businesses and micro-entrepreneurs, authorized to operate by BCB, from the authorization to provide payment transaction initiation services. According to the exposition of motives of BCB Resolution 257, "these institutions employ intensively digital resources in their activities and already provide financial and payment services in other modalities, in which they have developed relevant expertise".
BCB Resolution 257 will enter into force on December 1, 2022.
Our team is available for further information, as well as to assist you with the procedures necessary to comply with BCB's regulatory obligations.
Gustavo Flausino Coelho – gustavo@bastilhocoelho.com.br
Matheus Chagas Lamarca – matheus@bastilhocoelho.com.br