Bolsonaro restricts using Fintech companies to pay R$ 600 emergency aid in Brazil

May 15, 2020
Redator de Economia na UOL - Universo Online
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A Associação Brasileira de Fintechs (ABFintechs) criticou o veto presidencial.

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President Jair Bolsonaro (without a party) vetoed the possibility of using fintechs (technology companies in the financial market) in the payment of R $ 600 emergency aid. The measure had been approved by Congress in the project that expands the aid. Bolsonaro also vetoed other passages.

According to the president, the proposal related to fintechs created expenses for the federal government without indicating a source of funds in return. He also said that Congress has not demonstrated what the proposal's impact on the budget is.

With the veto, only public banks are authorized to operate emergency aid. They are still unable to hire fintechs to help distribute the money.

Caixa is currently responsible for paying the R $ 600 (or R $ 1,200, if the aid is for a mother who is head of the family). President Bolsonaro's veto can still be overturned by the vote by Congress.

Fintechs argue that the use of digital accounts and methods of payment such as credit and debit card machines would facilitate the distribution of emergency income during the coronavirus pandemic.

They say that fintechs can exploit niches with little access to the banking system, as well as people who have stopped using bank accounts because they are negative.

Caixa has been opening digital savings to beneficiaries of emergency aid, but the system showed instability, especially in the first weeks of payment. In addition, there were queues and agglomerations at Caixa and lottery branches to withdraw the money.

Fintechs criticize veto

The Brazilian Association of Fintechs (ABFintechs) criticized the presidential veto. The organization stated that the Congressional proposal would not bring mandatory expenditure to the government and that "social costs and the health of the population are a priority at this time".

"Transaction costs would be borne by fintechs, and transfers of funds to digital accounts would follow the same line, exempt from fees established for traditional financial institutions," said ABFintechs.

Check the schedule of the second installment of the aid.

Las opiniones compartidas y expresadas por los analistas son libres e independientes, y de ellas son responsables sus autores. No reflejan ni comprometen el pensamiento u opinión de Latam Fintech Market, por lo cual no pueden ser interpretadas como recomendaciones emitidas por la platafomra. Esta plataforma es un espacio abierto para promover la diversidad de puntos de vista sobre el ecosistema Fintech.

President Jair Bolsonaro (without a party) vetoed the possibility of using fintechs (technology companies in the financial market) in the payment of R $ 600 emergency aid. The measure had been approved by Congress in the project that expands the aid. Bolsonaro also vetoed other passages.

According to the president, the proposal related to fintechs created expenses for the federal government without indicating a source of funds in return. He also said that Congress has not demonstrated what the proposal's impact on the budget is.

With the veto, only public banks are authorized to operate emergency aid. They are still unable to hire fintechs to help distribute the money.

Caixa is currently responsible for paying the R $ 600 (or R $ 1,200, if the aid is for a mother who is head of the family). President Bolsonaro's veto can still be overturned by the vote by Congress.

Fintechs argue that the use of digital accounts and methods of payment such as credit and debit card machines would facilitate the distribution of emergency income during the coronavirus pandemic.

They say that fintechs can exploit niches with little access to the banking system, as well as people who have stopped using bank accounts because they are negative.

Caixa has been opening digital savings to beneficiaries of emergency aid, but the system showed instability, especially in the first weeks of payment. In addition, there were queues and agglomerations at Caixa and lottery branches to withdraw the money.

Fintechs criticize veto

The Brazilian Association of Fintechs (ABFintechs) criticized the presidential veto. The organization stated that the Congressional proposal would not bring mandatory expenditure to the government and that "social costs and the health of the population are a priority at this time".

"Transaction costs would be borne by fintechs, and transfers of funds to digital accounts would follow the same line, exempt from fees established for traditional financial institutions," said ABFintechs.

Check the schedule of the second installment of the aid.

Las opiniones compartidas y expresadas por los analistas son libres e independientes, y solamente sus autores son responsables de ellas. No reflejan ni comprometen el pensamiento o la opinión del equipo de Latam Fintech Hub y, por lo tanto, no pueden interpretarse como recomendaciones emitidas por la plataforma. Esta plataforma es un espacio abierto para promover la diversidad de puntos de vista en el ecosistema Fintech.
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