Notes on Regulating Branchless Banking in Brazil

February 3, 2008    

In contrast to the use of retail agents by banks (known as "bank-based branchless banking"), nonbank-based branchless banking is only in its incipient stage in Brazil. However, there is remarkable space for nonbanks to compete for customers with low value accounts, since approximately 80 million adults still lack access to bank accounts. Brazil has an excellent opportunity to adjust its regulatory framework to fine-tune the balance between openness, safety and service continuity by (i) taking the necessary measures for retail agents to expand further the access to banking services and (ii) opening the doors to nonbanks while setting adequate minimum requirements and principles for their participation in the supply of low-value financial services.