The regulation of fees charged by credit card brands is not a Brazilian jabuticaba; in England the creation of a regulation was discussed – and appealed to
In the last decade the Central Bank of Brazil (BCB) embraced a major regulatory agenda aimed at opening up the financial market. With this, he has actively sought to strengthen competition in the sector, stimulate innovation, promote greater financial inclusion and, moreover, mitigate our well-known banking concentration. the creation of pix and the adoption of supervisory rules on payment methods aimed at facilitating the entry of technological companies (the so-called fintechs) are among the strategies adopted to this end. In this context, the recent increase in the so-called “brand fees”, charged to both issuers and acquirers, deserves attention.
Brand fees are linked to all card transactions and, therefore, impact the fees incurred in accepting the card by merchants. They are determinants of the overall cost of the financial ecosystem. From a regulatory perspective, increases in the flag tariff are counterproductive because they inhibit or considerably weaken the systemic benefits sought by other BCB measures.
The regulation of fees charged by credit card brands is not a Brazilian jabuticaba. In other parts of the world (such as England), there have been discussions – and effective action – regarding regulators setting (regulating) limits for them. In Brazil, the econometric studies conducted by the BCB in 2021 showed that the interchange fee (TIC) limitation increased market transparency and strengthened competition, also demonstrating that the fee reduction was gradually and increasingly passed on to resellers. Contrary to this trend, increases in brand fees can now threaten or even neutralize these benefits. This is because both the interchange fee and the brand fee constitute a significant part of the amount paid by merchants to card acquirers, costs which, as mentioned, affect us consumers.
In Brazil, where bank concentration is still an issue and card brands have close ties to the big banks, the increase in brand fees should sound a warning sign. In order for this trend not to undo the important efforts that the Brazilian financial regulator has made in recent years, generating risks and losses for Brazilian consumers and retailers, it is essential that it does not go unnoticed in the eyes of those who work so hard and have been willing to implement the regulation of virtuous finance.
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Source: Terra
Rose James is a Gossipify movie and series reviewer known for her in-depth analysis and unique perspective on the latest releases. With a background in film studies, she provides engaging and informative reviews, and keeps readers up to date with industry trends and emerging talents.
