Brazil’s President vetoes use of fintechs to distribute emergency aid

LatamList – President Jair Bolsonaro vetoed a government bill that allows the use of fintechs for the $110 (R$600) payment of emergency aid to families in need during the COVID-19 pandemic. The President vetoed the proposal stating there is no indication of how expenses for the federal government will be repaid.

During the pandemic, many families are under increasing financial difficulty. Caixa Bank currently pays $110 (R$600) to families in need, or $220 (R$1200) if the aid is for single mothers.  Although Caixa opened digital accounts to distribute the aid, the system is unstable and customers struggle to access the money.

The use of Brazilian fintechs to pay families was proposed to facilitate the distribution of funds through digital banking. However, with the veto, only traditional banks can distribute emergency aid.

The Brazilian Association of Fintechs (ABFintechs) criticized the decision, stating that the wellbeing of the public is currently a priority.

“The transaction costs would be at the charge of the fintech, and the transfer of funds to digital funds would follow the same line, exempt from the tariffs established for the traditional financial institutions,” said ABFintech in response to the President’s concerns.

Congress can still overturn the President’s veto.

Read more on Economia.

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