While approximately 90% of bank customers in Latin America leverage some form of digital banking, Brazil holds the top slot at 98% of bank consumers, followed by Mexico at 94%. The Brazilian government is fostering this digital push through Pix, the instant payments platform powered by the Central Bank of Brazil. It has been a marked success since its introduction at the end of 2020, with six out of 10 Brazilians using it regularly. One of the fastest-growing trends in the financial sphere is open banking, which offers consumers control of their financial data and prevents banks from blocking money movements between other financial services.
FinTechs are quickly gaining ground in Brazil, and the government is taking steps to make sure its laws reflect the new normal. The Central Bank of Brazil recently unveiled stricter FinTech regulations, which would bring FinTechs under the same rules as other financial institutions (FIs) and make it easier for new players to enter the market. Credit card issuer Nubank, payment firm PagSeguro and digital wallet PicPay are the largest companies likely to be affected. The new regulation is expected to start in January 2023, with the rollout finalized by 2025. Digital payments are becoming more popular worldwide, especially as the number of banked individuals continues to grow and digital banking becomes the primary way individuals interact with their FIs. Brazil, in particular, has become a digital payments leader, thanks in large part to its instant payments platform, Pix, which more than half of the country’s consumers now use.