According to a report in Bloomberg citing the Brazilian Administrative Council for Economic Defense or CADE, the Brazilian regulators are looking to see if the credit card companies ran afoul of payment network rules. Bloomberg noted that Visa said in an annual regulatory filing that it’s also looking into the country’s Elo Network as well. Bloomberg said the issue has to do with a network rule that requires a merchant’s bank to get certain information from payment facilitators. Bloomberg reported that Visa said it was cooperating with the Brazilian regulators that launched the inquiry in October. A Mastercard spokesman told Bloomberg the payment company didn’t have an immediate comment, noted the report. American Express said it wasn’t contacted by CADE about the inquiry but will cooperate with regulators.
The Brazilian digital payments market has exploded over the past few years, with more than thirty payment processors vying for customers business. StoneCo and PagSeguro, two of the payment processors that were among the more than thirty to attend a meeting with Brazil’s central bank, went public in the U.S. earlier in 2018.
Late last month Visa made a strategic minority investment in Conductor, a digital payments processing technology platform in Brazil. In a press release, Visa said the investment will go to help Conductor expand its products and to accelerate innovation in payments. The investment reinforces an existing partnership between the two, Visa noted in the press release. Conductor, which has been backed by Riverwood Capital since 2014, is a key technology processing platform for retailers, banks and other companies in Brazil, according to the press release. Visa said its investment in Conductor is part of the payment company’s global strategy to open up the Visa ecosystem and support a broad array of new partners.