We’re covering the Central Bank and its decision to greenlight TransferWise as an exchange brokerage. Yet another debt renegotiation program being discussed in Congress. And the government’s idea for a new cash transfer initiative.
Central Bank gives TransferWise thumbs up
After a two-year evaluation process, Brazil’s Central Bank has authorized British fintech TransferWise to operate in the country as an exchange brokerage. The international money transfer service, most recently valued at USD 3.5 billion, has operated in Brazil since 2016, but has always had to use a Brazilian bank as an intermediary. Now, the company promises to reduce its fees from an average of 1.5 percent to somewhere closer to its global 0.74-percent average.
Why it matters. The decision by the Central Bank should foster competition in Brazil’s highly concentrated banking industry. With something of a homegrown hegemony, local banks can afford international fees as high as 13 percent.
- For some institutions, fees account for up to 25 percent of their revenue.
How it works. According to TransferWise, its fees are lower than traditional banks because it uses a system of compensation among local bank accounts — using domestic currencies. In Brazil, one of the company’s top 5 priority markets, TransferWise claims...