By Brazil Stock Guide – Brazil’s antitrust regulator, the Administrative Council for Economic Defense (Cade), upheld a preventive measure against Itaú Unibanco in an ongoing probe into alleged anticompetitive practices in the digital wallets market, signaling that it sees credible indications of harm to competition while the case proceeds.
The tribunal followed the opinion of its president and case rapporteur, Gustavo Augusto, finding that the legal thresholds for maintaining the measure — including evidence of potential wrongdoing and risk of damage from delay — remain in place. The ruling keeps in force restrictions aimed at preventing potentially discriminatory refusals of transactions involving digital wallets such as PicPay, Mercado Pago and RecargaPay.
At the core of the investigation is whether Itaú has been limiting credit card transactions when used within third-party wallets while allowing similar operations through its own channels — a practice that could amount to barriers to entry or expansion for competing platforms.
Transparency becomes the rule
Beyond maintaining the measure, Cade introduced a key requirement: any refusal of transactions must be based on objective, clear and non-discriminatory criteria. The decision does not prohibit risk-based controls, but it constrains how banks can apply them, effectively pushing for greater transparency in credit decision-making tied to payment flows.
The move reflects a broader regulatory effort to balance financial institutions’ autonomy in managing risk with the need to preserve fair competitive conditions in a fast-growing digital payments ecosystem.
Procedural win for Itaú
Itaú secured a partial victory on due process grounds. The tribunal ordered that the bank be granted broad access to documented evidence used in the case, including public versions of materials previously classified as restricted, reinforcing its right to full defense.
The decision aligns with established Brazilian Supreme Court precedent that guarantees defendants access to evidence already produced in investigative proceedings — a factor that may influence both the pace and the evidentiary robustness of the case going forward.
Business model under scrutiny
The dispute highlights a deeper structural tension in Brazil’s financial system. Banks argue that certain wallet-based transactions — particularly those that effectively convert credit limits into liquidity for payments — carry higher default risk, justifying tighter approval policies.
Fintechs, in turn, contend that such restrictions undermine interoperability and create artificial competitive barriers in a market driven by innovation and rapid user adoption.
Data from the Central Bank of Brazil show that Pix has already surpassed cards as the country’s leading electronic payment method, underscoring how diversified the ecosystem has become — and complicating the notion of any single player controlling an “essential input.”
What comes next
Cade also authorized further economic analysis by its Department of Economic Studies (DEE), whose findings are expected to inform the final ruling. Until then, the preventive measure remains in place, keeping Itaú under regulatory pressure and placing broader industry practices under the spotlight.
A delicate balance
The outcome of the case could reshape how credit risk is treated within increasingly interconnected payment systems. While stricter oversight may bolster fintech competition, it also raises the risk of unintended consequences, including changes in credit pricing, tighter limits or shifts in banks’ willingness to support certain transaction types.
At its core, the dispute extends beyond a single institution: it is about defining who ultimately bears the cost of embedded credit in modern payment flows — and how far regulators should go in redistributing that burden.
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