Central bank of Brazil grants Google Pay payment institution status

Google Pay has been granted payment institution status by the central bank of Brazil.

The approval gives the Alphabet-owned mobile payments operator approval to operate as a payment institution in Latin America’s largest economy, giving it the ability to initiate payment transactions.

Payment initiators in Brazil initiate a transaction ordered by the final user, but do not hold funds or manage the payment account.

Google Pay operates as a virtual wallet, allowing users to save digital versions of credit and debit cards, boarding passes for flights, gift and loyalty cards and event tickets. A spokesperson for Google said that the move will provide “more payment options to users through our platforms in Brazil.”

This year, Google has pledged $1.2 billion to invest in Latin America’s ongoing digital transformation. Google Pay first launched in Brazil in 2018, and supports cards from institutions including the Bank of Brazil, Neon Bench, Bradesco, and CEF among others.

Earlier this week, Brazil's National Monetary Council authorised fintechs to initiate payment transactions in the country.

Despite initial concerns, it is likely that the Brazilian central bank's ambitious FinTech innovation plan will continue under president-elect Luiz Inácio Lula da Silva, who beat the incumbent far-right leader Jair Bolsonaro in a tight general election. Central bank president Roberto Campos Neto will serve until at least 2024, and has said that he will work with the socialist Lula in the “best way possible.”

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