{"id":96600,"date":"2025-11-11T15:57:55","date_gmt":"2025-11-11T18:57:55","guid":{"rendered":"https:\/\/murray.adv.br\/?p=96600"},"modified":"2025-11-11T15:57:55","modified_gmt":"2025-11-11T18:57:55","slug":"central-bank-raises-liability-of-card-networks","status":"publish","type":"post","link":"https:\/\/murray.adv.br\/en\/central-bank-raises-liability-of-card-networks\/","title":{"rendered":"Central Bank raises liability of card networks"},"content":{"rendered":"
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New rule makes networks ultimately responsible for failures in payment arrangements<\/em><\/h6>\n<\/div>\n<\/div>\n
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11\/11\/2025\u00a0<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n

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Brazil\u2019s Central Bank introduced on Monday a\u00a0new set of rules governing risk management in payment arrangements<\/strong>, making it clearer who is financially responsible when a link in the transaction chain fails.<\/p>\n<\/div>\n

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Under the new framework, card networks\u2014which act as the arrangement operators\u2014assume greater responsibilities<\/strong>, though with some flexibility in determining the guarantees they require from other participants. The measures come a year after the Central Bank held a public consultation on the topic, prompted by issues involving the card administrator Credz and\u00a0travel operator 123 Milhas<\/a>.<\/p>\n<\/div>\n

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A proposal to create an industry-wide guarantee fund, criticized by market players, was dropped from the final rule. A payment arrangement is a set of rules that enables a specific type of transaction. In the case of cards, the networks (such as Visa and Mastercard) define how participants interact, such as acquirers (the \u201cPOS machine\u201d companies) and issuers (typically banks).<\/p>\n<\/div>\n

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The resolution takes effect upon publication, but networks will have 180 days to request authorization for any regulatory adjustments needed to comply. Existing rules remain valid until the Central Bank approves the changes.<\/p>\n<\/div>\n

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According to the Central Bank, the rule makes it explicit that the card network is responsible for ensuring payment of all transactions to the receiving user\u2014without exception. This includes the obligation to use the network\u2019s own funds if existing protection mechanisms prove insufficient.<\/p>\n<\/div>\n

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\u201cThe network will be solely responsible for monitoring and managing the risks of arrangement participants. If protection mechanisms are insufficient, it must use its own resources to guarantee payment to merchants,\u201d the Central Bank stated.<\/p>\n<\/div>\n

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The debate over risk management in card arrangements intensified in 2023, after Credz ran into trouble and was ultimately acquired by DM, in a deal involving several market participants\u2014including Visa\u2014to avoid systemic fallout.\u00a0Concerns also rose around Will Bank<\/a>, controlled by the same group as Banco Master, prompting Mastercard to engage in talks to find a buyer for the fintech.<\/p>\n<\/div>\n

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An executive from the card industry told Valor that while networks now face higher liability, the clarity is positive. \u201cIt\u2019s now very clear that the networks are financially responsible for their arrangements, which should make the market safer,\u201d he said.<\/p>\n<\/div>\n

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A financial lawyer noted that by becoming \u201cguarantors of last resort,\u201d the networks now face credit risk exposure, a shift that could transform the industry.<\/p>\n<\/div>\n

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The Brazilian Association of Credit Card and Service Companies (Abecs), which led private-sector discussions, said only that it is \u201canalyzing the resolution together with its members.\u201d Meanwhile, the Brazilian Association of Payment Institutions (Abipag) welcomed the rule, highlighting progress such as: \u201cThe guarantee that merchants will receive payment for all authorized card transactions; improved visibility into settlement processes; and greater transparency in fee collection.\u201d<\/p>\n<\/div>\n

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In earlier drafts, released in October 2023, the BC had suggested a shared guarantee fund financed by market participants. Abecs opposed that model, arguing instead for individualized risk management, where each participant\u2019s exposure corresponds to its own risk profile, with resources held in escrow accounts. The Central Bank accepted this approach, mandating the creation of segregated accounts for settlement funds within each arrangement. However, each network will also be required to maintain its own guarantee reserve for extreme situations.<\/p>\n<\/div>\n

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To balance risks within arrangements, the Central Bank limited the financial liability of other participants in chargeback cases to 180 days. After that period, if permitted under the arrangement\u2019s rules, the card network assumes responsibility.<\/p>\n<\/div>\n

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The resolution also prohibits networks from allowing participants to demand guarantees from one another and forbids acquirers or sub-acquirers from discriminating against specific issuers. In practice, this means risk management will now be fully centralized within the card network, which can no longer delegate oversight of sub-acquirers to acquirers.<\/p>\n<\/div>\n

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\u201cThe new rule prevents networks from transferring sub-acquirer risk management to acquirers,\u201d the Central Bank emphasized. According to\u00a0Vicente Piccoli<\/strong>, partner at FAS Advogados, the rule represents a win for acquirers, freeing them from the duty of monitoring sub-acquirers. \u201cThe general trend is to strengthen the responsibilities of the arrangement operator, who has full visibility of the system and is best positioned to manage overall risk,\u201d he said.<\/p>\n<\/div>\n

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Larissa Arruy, partner at Mattos Filho, noted that the Central Bank gave networks a degree of discretion. \u201cMy main concern now is the potential market impact. The Central Bank is clearly trying to enhance security in the financial and payment ecosystem\u2014these are positive steps, but the costs remain uncertain.\u201d<\/p>\n<\/div>\n

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For\u00a0Kenneth Ferreira,<\/strong>\u00a0a partner with the banking, transactions, and financial services practice of law firm Lefosse, the resolution is \u201cvery welcome,\u201d as it harmonizes risk management practices, clarifies responsibilities, increases transparency, and protects financial flows to end users.<\/p>\n<\/div>\n

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\u201cIt introduces new concepts, requiring continuous monitoring, stress testing, backtesting, and periodic policy reviews. A key change is that all sub-acquirers must join centralized settlement within 180 days, ensuring traceability of funds. Previously, smaller players were exempt, creating distortions,\u201d he explained.<\/p>\n<\/div>\n

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Visa said it is \u201cevaluating the issue.\u201d Mastercard did not comment. Elo stated that it complies with all Central Bank regulations and is prepared to follow the new directives, adding: \u201cThe company already provides a system of guarantees to the market and is ready to align with the new security and transparency standards.\u201d<\/p>\n

*By\u00a0Gabriel Shinohara,\u00a0\u00c1lvaro Campos\u00a0and\u00a0Lais Godinho\u00a0\u2014 Bras\u00edlia and S\u00e3o Paulo<\/p>\n

Source: Valor International<\/p>\n

https:\/\/valorinternational.globo.com\/<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

New rule makes networks ultimately responsible for failures in payment arrangements       11\/11\/2025\u00a0 Brazil\u2019s Central Bank introduced on Monday a\u00a0new set of rules governing risk management in payment arrangements, making it clearer who is financially responsible when a link in the transaction chain fails. Under the new framework, card networks\u2014which act as the […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8106],"tags":[26585],"class_list":["post-96600","post","type-post","status-publish","format-standard","hentry","category-murray-news","tag-central-bank-raises-liability-of-card-networks"],"yoast_head":"\nCentral Bank raises liability of card networks - Murray Advogados<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/murray.adv.br\/en\/central-bank-raises-liability-of-card-networks\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Central Bank raises liability of card networks - Murray Advogados\" \/>\n<meta property=\"og:description\" content=\"New rule makes networks ultimately responsible for failures in payment arrangements       11\/11\/2025\u00a0 Brazil\u2019s Central Bank introduced on Monday a\u00a0new set of rules governing risk management in payment arrangements, making it clearer who is financially responsible when a link in the transaction chain fails. 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