Brazil's central bank wants to regulate fees retailers must pay when customers swipe debit cards to boost the use of electronic payments and add to already enhanced consumer protections, three people with knowledge of the matter said. In a Friday meeting at central bank offices in Sao Paulo including representatives of card companies and retailers, the regulator made clear its interest in capping fees that card processors charge retailers, according to two of the sources, who requested anonymity because the matter is not yet public.
Fees paid by retailers in debit card transactions are freely set in Brazil and usually range from 1 percent to 3 percent of transaction value. One source said retailers argued at the meeting that fees average around 0.6 percent of purchase values globally and a few cents per swipe in the United States. The planned regulations are the latest example of the central bank using its powers as regulator of the financial system to seek consumer protections in an increasingly concentrated banking sector.
Lower transaction costs would also stimulate card penetration - a goal shared by banks, credit card processing firms and retailers seeking to reduce money laundering and violence against clients with cash. Transactions using credit and debit cards amount to 29 percent of private consumption in Brazil, according to Abecs data, compared to as much as 85 percent in wealthier countries. A reduction in swipe fees could weigh heavily on the revenue of credit card processing firms such as Cielo SA and the credit card processing units of Ita? Unibanco Holding SA and Banco Santander Brasil SA.
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