Reuters: Regulatory News: Brazil may review stance on payment options-report

Reuters: Regulatory News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

Brazil may review stance on payment options-report Jul 4th 2012, 11:47 Wed Jul 4, 2012 7:47am EDT * Brazil may review earlier stance on price gaps * "No surcharge rule" seen hurting the poor more * Scrapping rule might hamper merchant acquirers SAO PAULO, July 4 (Reuters) - The Brazilian government may encourage retailers to charge less for goods bought with cash, reversing a longstanding position on price differentiation, in a bid to protect low-income consumers, the online edition of newspaper O Estado de S. Paulo said on Wednesday. The differentiation of prices between cash and credit cards has long been discussed but industry groups representing card payment processors always opposed the idea, citing the potential disincentive it could create for credit card use. According to Estado, antitrust regulators are considering revising their earlier stance on the issue. A decline in local borrowing costs to single-digit levels and the massive use of cards as an alternative, rather than a substitute, for cash may make it easier for the government to reconsider its position, Estado quoted Alexandre Lauri Henriksen, a key advisor to antitrust body Cade, as saying. "In the past decade, when we began discussing this, people would mostly pay cash in hand and, if they didn't, they paid a 10 percent or 20 percent surcharge," Henriksen told lawmakers at a congressional testimony. "But now, things are different," Estado quoted Henriksen as saying. The so-called "no surcharge rule", or the lack of price differentiation, disadvantages the poorest consumers that never or seldom use cards, Estado said, citing Guilherme Campos, a lower house lawmaker. The Estado story underscores the resurgence of new regulatory changes in the $400 billion payment processing industry that executives say might hamper profits for so-called merchant acquirers - companies that process and settle card transactions. For months, analysts have feared that the end of the "no surcharge rule" could erode profit margins for Cielo and Redecard, the nation's largest merchant acquirers, by lowering incentives to use cards in favor of cash. Calls to Brasilia-based Cade and the lower house's development, trade and industry committee for confirmation of Henriksen's comments were not immediately answered. Late last year, the central bank said in an annual report on the card payment processing sector that incumbent acquirers are bearing the brunt of declining fees and the entry of new competitors, and failed to press for regulatory changes in the industry. Although it mentioned the issue of price differentiation, the central bank fell short of recommending ways of implementing it. Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions