Electronic payments

Electronic payment systems

Are there any rules, restrictions or other relevant considerations regarding the use of electronic payment systems in your jurisdiction?

Yes. In Brazil, it is possible to execute payments by numerous methods, including wire transfer and the use of electronic payment instruments (debit, credit and stored value/pre-paid cards).

The electronic payments industry has an important role in the Brazilian economy as the acceptance of electronic payment instruments increased significantly over the past decade. Accordingly, the federal government enacted Law 12,685/2013 to regulate the players and transactions operated in the local payments industry (e-Payments Law).

The e-Payments Law provides the legal and regulatory framework for ‘payment arrangements’ (ie, the set of rules governing a payment scheme, such as credit or debit card transactions), and ‘payment agents’ (ie, any agent that issues a payment instrument or acquirers a merchant for payment acceptance).

Both payment arrangements and payment agents became part of the Brazilian Payments System (SPB, which includes all entities, systems and procedures for the processing and settlement of transactions involving fund transfer, foreign currencies, financial assets or securities) and subject to oversight by the Central Bank, which is responsible for implementing the policies adopted by the Monetary Council (CMN) and issuing regulations in accordance with such policies. The Central Bank is responsible for, among other things, authorising the operations and supervising the financial institutions’ activities in Brazil. As a result, the entire market of credit, debt and pre-paid cards became subject to the CMN and the Central Bank regulation and supervision. Until then, such market was not subject to any specific regulation. Payment agents, though, are not deemed to be financial institutions and are prohibited from engaging in activities that are exclusive to financial institutions (eg, lending and deposit taking).

Following the enactment of the e-Payments Law, the CMN and the Central Bank adoped a set of rules on payment arrangements and payment agents, which became effective in May 2014 and encompasses, among other things:

  • the definition of ‘payment accounts’ (which are broken down into pre-paid and post-paid accounts), the types of payment agent and the definition of arrangements excluded from the SPB;
  • the procedures for incorporation, organisation, authorisation and operation of payment agents, as well as for the transfer of control, subject to the Central Bank’s prior approval; and
  • consumer protection, anti-money laundering compliance and loss prevention rules that should be followed by payment agents and payment arrangers subject to Central Bank oversight.

Following discussions with market players and industry representatives, the Central Bank has been adjusting and improving the regulations over time, mainly to include operational and non-discriminatory tools to foster competition in the payments market. The regulation was most recently updated in early 2018.

Virtual currencies

Are there any rules or restrictions on the use of virtual currencies (eg, bitcoin)?

No. In Brazil, virtual or cryptocurrencies such as bitcoin are subject to the general treatment of assets established by Law 10,406/2002 (the Brazilian Civil Code). This is because cryptocurrencies are not considered currencies in Brazil and are therefore not regulated by the Central Bank. They are considered as assets.

Therefore, the transactions carried out in cryptocurrencies are subject to the general provisions of the Brazilian Civil Code. For instance:

  • the acquisition of cryptocurrencies using Brazilian reais will be considered an acquisition of assets and subject to all provisions applicable to the purchase and sale of movable assets; and
  • the use of cryptocurrencies for the ‘acquisition’ of other assets will be considered an exchange of assets and subject to all provisions applicable to the exchange of movable assets.

This treatment however is not applicable to any such assets that classify as a security under the Brazilian Securities Law (which is similar to the US definition).]