You’re reading The Brazilian Report’s weekly tech roundup, a digest of the most important news on technology and innovation in Brazil. This week’s topics: the right to be forgotten; the next frontier for Brazilian fintechs; what’s new in Brazil’s 5G race.
The next frontier for Brazilian fintechs
With the average Brazilian becoming more financially sophisticated in recent years, the once-unattainable dream of investing abroad is now edging closer to reality. However, the wish for Brazilians to diversify their portfolio has come up against the country’s cumbersome process for international transfers — which is where homegrown fintechs have stepped in.
- New data from the Central Bank shed light on the potential of Brazil’s international transactions market. In 2020, Brazilians received USD 3.3 billion from foreign accounts, the largest total since the monetary authority began measuring in 1995. The Central Bank says that these transfers are largely carried out by Brazilian expats sending money home, and the total has increased due to the devaluation of the Brazilian Real.
Fintechs to the rescue. Over the past year, fintechs such as Nomad and C6 Bank are offering their customers the possibility of opening accounts abroad and obtaining local debit cards. This not only allows clients to stockpile USD for a potential future holiday but also use dollar reserves as a way to save money.
- Being fully digital, these companies have fewer expenses and offer cheaper costs than regular bank transfers. Nomad, for instance, claims its account offers savings of up to 10 percent, while C6 Bank estimates their customers face costs at least 7 percent smaller than using traditional banks.
Fintechs: changing plans. When C6 Bank launched their dollar-based account before the Covid-19 pandemic, tourists were the target audience. However, once social restrictions were in place, the bank saw two changes in customer behavior: clients were using their accounts and debit cards for e-commerce purchases and as an investment option.
- “As people couldn’t travel, we’ve seen people opening the accounts, but not using them as we expected. Right now, they keep it to save in dollars and for shopping on e-commerce sites. But, when social restrictions are lifted, we expect users to skyrocket,” said Maxnaun Gutierrez, head of products at C6 Bank, in an interview with The Brazilian Report.
Next steps for fintechs. Building on its first initiative, C6 Bank launched a global account in Euros in December of last year. Now, it plans to allow customers to invest with the money they have saved. “We’ve already opened a brokerage in New York that currently works for our institutional...
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