Beginning in April 2023, Prepaid Card Interchange Fees in Brazil will be limited to 0.7%


The Central Bank of Brazil (BCB) will impose interchange fee limitations on prepaid cards and simplify the settlement terms for debit and prepaid card transactions beginning in April 2023.

According to Reuters, the prepaid card interchange charge maximum will be 0.7%. According to the BCB, the changes are expected to “increase the payments ecosystem’s efficiency, boost the use of less costly payment instruments, and enable shops to cut their costs to take these cards.”

The central bank solicited public feedback on the issue last year, but the submissions advocated a 0.5% cap for both debit and prepaid cards, which would have enraged FinTechs much more than the current 0.7% cap.

According to Reuters, debit card interchange fees presently range from a combined weighted average computation of 0.5% to a maximum value per transaction of 0.8%. Debit card interchange fees will only be limited to 0.5% per transaction under the BCB’s modifications.

The BCB had been requested by Brazilian banks to level the playing field by establishing a cap on interchange fees for prepaid cards. According to the research, the development of FinTechs operating without charge limitations provided them an unfair edge.

According to Brazilian FinTech Nubank, interchange fees on prepaid cards accounted for 7% of its income in the year ending June 30. According to Nubank, the challenger bank’s income would have decreased by 2.9% if the cap had been in place.

When the news of the fee limitations first surfaced in noon trade, Nubank shares were down 2.3%, according to the article. Inter & Cofell’s stock dropped 9.8%, while PagSeguro Digital, a Brazilian payments provider, saw its shares drop 9.5%.