Brazil’s retail companies move to become fintechs

Amid a scenario marked by critical regulatory changes in the local financial sector, Brazilian retail companies have found new opportunities to accelerate their growth and extend their reach.

Companies around the South American country are driving a movement towards the “fintechtization” of the sector, aiming to create more affordable financial products to build customer loyalty and attract small and medium-sized entrepreneurs looking to enter the market.

For some of Brazil’s most prominent retail groups — such as Via and Magazine Luiza — this strategy has been a crucial part of their business models over the past year. 

In April, Via announced the acquisition of fintech Celer, a Bank-as-a-Service (BaaS) platform that allows other fintechs to offer their customers a complete digital account integrated with payment services, including cash receiving and withdrawals, card issuing and processing, billing management, and transfers.

Surprising launch

In a move that surprised its competitors, Magazine Luiza also took another step in its entry into the market, launching in May of this year its own fintech, which brings together platforms and teams from startups acquired by the company in recent years and also includes a credit card service for businesses, with a focus on the more than 160,000 small retailers in the company’s marketplace.

According to Magazine Luiza, this fintech was, from its conception, one of the ten largest in Brazil, with more than 16 million customers.

Until this year, the Brazilian fintech market seemed destined to be dominated by only large companies with massive investments. Still, recent efforts by the Brazilian Central Bank to increase competitiveness and diversity among fintechs have empowered much smaller players to enter locations where they are needed most.

Pagmoda CEO Marcio Campos headshot
Pagmoda CEO Marcio Campos

This is the case with Pagmoda, a fintech that operates in a prominent region of small and medium-sized businesses in the Brás neighborhood in central São Paulo. Founded in November 2020, Pagmoda provides various financial services to retailers in what is considered the largest retail center in Latin America — from digital accounts to card machines. 

“We concluded that for many of the retailers in Brás, it was difficult to access certain services that large banks previously provided,” said Pagmoda CEO Marcio Campos in an interview with Fintech Nexus. “Here we have many small merchants, some of whom are immigrants, who end up losing the opportunity to access these products due to their lack of a very high credit score. So we decided to enter the market and cover the gap.”

Financial paralysis

For Campos, whose company also manages several spaces rented to retailers who want to sell in Brás, the lack of access to financial products paralyzes startup businesses and prevents them from growing financially. 

“We already have a relationship with the people who sell here, with the people who rent our spaces, and this has enabled us to create our own credit score that improves mutual trust. If my shopkeeper makes money, I will be making money at the end,” said Campos. “I believe that in the future, more retail companies, especially those in specific niches, will join this type of system and grow with the benefits it brings,” he said.


Another company that has been embracing this new business model is the jewelry retailer Acium. The company’s primary goal is to be a bank for its franchisees. With 260 stores spread throughout Brazil, Acium saw great potential to grow by independently carrying out the franchise’s financial operations.

“Each industry and each sector has its own peculiarities, but banks tend to impose the same rules for all companies. This is one of the reasons that have moved companies to change the system and become more independent,” Carlos Ogata, CEO of Acium Bank, told Fintech Nexus.

Recently, the retailer created Acium Bank and enabled all of its partner customers to have access to accounts and payment machines exclusive to the group — which invoices more than R$150 million a year in the jewelry industry in Brazil. 

Tailor-made fintechs

To structure the processes that make these services viable within companies, consulting firms of the so-called “banking as a service” (BaaS), such as A&S Partners, look for singularities that attract clients from each area and structure tailor-made fintechs.

For Wagner Moraes, founding consultancy partner, the boom of fintechs in the retail sector is at its peak in Brazil. The expectation is for exponential growth in the region in the coming years.

“This movement has grown a lot in recent years because companies have discovered that they no longer need banks for anything,” Moraes said. “Brazil today has the second highest banking concentration in the world – which is only smaller than the Netherlands — with 82% of the country’s financial operations concentrated in five banks. This concentration is extremely harmful to the country and causes the quality of the institutions that provide these services to decline and the opportunity for credit to be scarce.”

  • Jorge C. Carrasco

    Jorge C. Carrasco is a Contributing Reporter at Fintech Nexus. He reports on fintech, economy, banking, startups, and technology, covering the most impactful stories from a Latin American perspective.

    He has contributed to several international publications, such as Foreign Policy, The Spectator Australia, Estadão, Época, Washington Examiner, and Quillette. Originally from Havana, Cuba, he is now based in Brazil.