How to obtain a payment license from the Central Bank of Brazil

The Brazilian financial market is one of the most regulated in Latin America. To legally operate as a Payment Institution (IP) in Brazil, companies, including foreign entities, must comply with the requirements established primarily by BCB Resolutions No. 80 and No. 81, both issued in 2021.

1. What Is a Payment Institution?

Payment Institutions are legal entities authorized to facilitate payment services and the movement of funds between users and merchants within a payment arrangement (such as credit cards, bank slips, transfers, or PIX), without extending credit on their own. They may operate in three main categories:

• Electronic Money Issuer (EMI): manages prepaid accounts and enables payments (PIX, Boleto).
  
• Postpaid Payment Instrument Issuer: such as credit cards linked to a payment account.
  
• Acquirer (Credenciador): enables merchants to accept payment instruments and participates in the settlement process.
  
• Payment transaction initiator: carries out transactions without providing an account.

2. When Is Central Bank Authorization Required?

Not all operations require immediate authorization. A Payment Institution must request authorization from the Central Bank of Brazil once it reaches any of the following thresholds:

• Operates with Electronic Money Issuer (EMI);
• Intermediates over BRL 500 million in transactions per year;
• Manages over BRL 50 million in prepaid account balances.

If these thresholds are not met, the company may operate by joining an authorized payment arrangement, observing all applicable governance, security, and settlement rules.

3. Key Legal and Regulatory Requirements (BCB Resolutions No. 80 and No. 81)

1. Corporate Structure

• The IP must be organized as either a Limited Liability Company (with more than one partner) or a Corporation (S.A.).
  
• Single-member companies are not accepted.
  
• The company’s corporate name must include the term “Payment Institution”.

2. Minimum Capital Requirement

• The IP must have a fully paid-in capital of at least BRL 2,000,000.00, and demonstrate financial capacity appropriate to the risks of its operations.

3. Governance and Compliance

• Implement a corporate governance policy, approved by the board of directors or executive management, with regular reviews.
  
• Establish Anti-Money Laundering (AML) and Know Your Customer (KYC) policies, as well as clear internal controls.
  
• The compliance structure must be internal and independent, with direct reporting channels.

4. Licensing Procedure

The license application must be submitted through the Central Bank’s Authorization Request System, including corporate documents, proof of lawful origin of funds, identification of the ultimate beneficial owner (UBO), and a comprehensive business plan.

4. Final Considerations

Foreign companies aiming to enter the Brazilian market as Payment Institutions must be well-prepared. The regulatory framework is detailed and requires strict adherence to rules on corporate structure, governance, and compliance.Having legal and accounting advisors specialized in fintechs and Central Bank, like NDM regulations is essential to avoid mistakes in the authorization process and ensure successful operations in Brazil.

Written by Benny Maganha