In Brazil, the antitrust watchdog, CADE, is looking into the credit card industry, with an eye on possible anticompetitive practices.
The investigation comes, Reuters reports, after a complaint by Nubank, a Goldman Sachs-funded FinTech. The company offers credit cards and checking accounts to 3 million people in Brazil. Nubank also has approval in place to become a bank. Earlier this month, the company raised US$150 million in a financing round that was led by DST Global Investment Partners. Last year, the company was granted a credit line of 455 million reais (US$137.7 million).
Under the terms of the complaint, Nubank has alleged that some of the largest banks in the country, including Banco do Brasil, Itaú Unibanco Holding SA, Banco Bradesco SA, Banco Santander Brasil and Caixa Econômica Federal, have sought to stymie free competition in the industry. Reuters noted that the five largest banks in the country hold 85% of assets.
The complaint alleges that the services offered by banks—such as bank statement access and automatic debiting of card payments—have been stymied when it comes to FinTechs, and that those tech upstarts have been overcharged when it comes to offering those same services.
Of those banks, Reuters reported Banco do Brasil and Itaú Unibanco have denied any wrongdoing.
Nubank expanded from credit cards into digital accounts late last year. Reuters reported at the time, that while millennials are “the core demographic for Nubank’s credit card,” the company is now targeting 60 million Brazilians—roughly 30% of the population—who do not have a bank account.
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