The term BNPL, an acronym for Buy Now, Pay Later, has become one of the biggest trends in retail and the payments sector worldwide. The model allows consumers to split the payment for purchases into short-term, often interest-free installments, offering a flexible alternative to traditional credit cards.
But while BNPL emerged abroad as a disruptive innovation, in Brazil, it entered a market already deeply familiar with installment payments. So, how does this model work in the Brazilian context, what are its unique features, and, most importantly, how does it fit into the Central Bank’s regulations?
Content:
- What is BNPL in the international context?
- BNPL in Brazil: adapting to the “king of installments”
- How does the regulatory structure work with the Central Bank?
What is BNPL in the international context?
Globally, BNPL exploded in popularity as a digital solution offered at e-commerce checkouts. Companies like Klarna, Afterpay, and Affirm became giants by allowing customers, through an instant and simplified credit analysis, to split a purchase into a few installments (usually 3 or 4). The main attraction for the consumer is the absence of interest, provided payments are made on time. The business model of these companies is based on fees charged to retailers, who see BNPL as a powerful tool to increase conversion rates and the average ticket size of their sales.
BNPL in Brazil: adapting to the “king of installments”
For decades, Brazil has been “the land of installments.” The traditional crediário (store credit booklets) from large retailers and, later, interest-free installments on credit cards are already part of the Brazilian consumer culture. Therefore, the arrival of BNPL here was not a new concept, but rather an innovation in technology and user experience.
In Brazil, BNPL functions as an evolution of the traditional store credit, now in a 100% digital format and integrated into various platforms. Brazilian BNPL solutions offer credit at the point of sale (physical or online) with instant approval, allowing customers to pay in installments even without a credit card or available limit. Often, payments can be made via Pix, making the model even more accessible.
How does the regulatory structure work with the Central Bank?
The big question for anyone wanting to operate a BNPL business in Brazil is: which Central Bank license is required? The answer depends directly on the business model and the source of the funds used to finance the purchases.
A BNPL operation is, in essence, a consumer financing operation. Therefore, the company offering the credit must be backed by a regulatory structure. There are basically two main options:
Operating as a Direct Credit Company (SCD – Sociedade de Crédito Direto): This is the most comprehensive route. An SCD is a financial institution authorized by the Central Bank to conduct credit operations exclusively through an electronic platform and with its own capital. Obtaining an SCD license gives the company full autonomy to define its credit policies and operate independently, making it the ideal path for larger-scale projects.
Operating as a Banking Correspondent (Corban – Correspondente Bancário): This is the most common and accessible route. In this model, the BNPL company acts as an intermediary, “plugging into” a licensed bank or SCD that serves as the actual lender in the operation. The BNPL company is responsible for customer origination and the checkout experience, but the financing itself is granted by the partner institution. This structure significantly reduces the regulatory complexity and cost of entering the market.
In Brazil, BNPL has established itself not just as an alternative to the credit card, but as a powerful tool for financial inclusion. It allows millions of consumers without access to traditional credit to pay for their purchases in installments, while also offering retailers a way to increase their sales. For companies looking to explore this market, understanding the nuances of the country’s cultural attachment to installments and, most importantly, choosing the correct regulatory structure with the Central Bank—whether via an SCD license or a partnership as a Corban—is the fundamental step to building a successful and fully compliant business.
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