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Picking Your Payment Partner: Why KYC Matters More Than Ever In Brazil

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In my 8+ years in payments, I’ve seen the gig economy explode during the pandemic and then retract, marketplaces competing with Mercado Livre Brasil gain market share, international credit card issuance growth, and even dLocal‘s IPO, but I have also seen big names in the payment industry pay hefty fines because of compliance and regulation.
During it all, I’ve moved from sales and challenging negotiations with enterprise merchants like Brex, Fiverr, Shopee, and Sony to to overseeing strategic partnerships in Brazil for PayRetailers.
The relationships I’ve established during my career, as well as the valuable knowledge I’ve acquired while managing complex negotiations when helping businesses navigate the Brazilian market, fueled this transition, which was more than just a professional change.
In sales, I had a broad understanding of the payment landscape. But now, on the inside, I see the immense effort a reputable company invests in compliance. Let’s face it, you can’t fight the government.
That is why every company entering Brazil, particularly with the new sports betting legislation, ought to conduct an in-depth Know Your Business (KYB) on their selected payment service provider (PSP).
Here’s why this is important: When I first started learning about payments in 2015, there were only about ten significant providers. Today? Countless companies provide payment solutions.
This vast landscape might seem attractive on the surface, but remember, not all PSPs can handle sudden regulatory changes.
Brazil’s political climate is unpredictable, with regulations subject to sudden shifts. A PSP with a strong legal team can anticipate these changes and ensure your business stays compliant, avoiding costly disruptions.
Compliance is a marathon, not a sprint.
A serious PSP prioritizes compliance because it safeguards both them and their merchants. They understand the mountains of paperwork, the stringent regulations, and the potential consequences of non-compliance.
They have the necessary infrastructure and skills to enable efficient KYC/AML processes and strong data security.
You would not risk playing a key game with an untrustworthy teammate, would you? Similarly, your PSP shouldn’t be a gamble. They should be a reliable partner who predicts regulatory difficulties and assists you in navigating them.
They should have an established track record and the capacity to handle complex operations, particularly in an industry like sports betting, where large transactions and sensitive data are involved.
Do you think smaller, newer PSPs, lacking resources have the structure to support large merchants, especially when regulations become stricter?
With sports betting regulation on the horizon in Brazil, there will be an increase in PSP choices for operators. But remember, a cheap, flashy PSP might not have the regulatory muscle to protect you from future headaches.

Alexandre Pereira
Driving Payment Success with Banks, Acquirers and Card Schemes 🏦💳 | Payments Strategy ♜💡 | Global Cross-Border Payments Expert 🌎 | Payment Partnerships 🤝 | Payment Consulting 📋🎯


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