B3, the owner of the Brazilian stock exchange, recently started offering credit card receivables registration to payment acquisition companies. This service utilises a cloud-based, high-throughput asset registration system based on the Pismo financial services platform.
Representatives from B3 and Pismo discussed the development of this system in a presentation at Movimento Inovação Digital (MID), an association that brings together companies from several sectors to promote innovation.
B3 is Brazil’s most important financial market infrastructure company. It’s also the most significant trade repository in the country, managing various assets according to the rules of the Central Bank.
The receivables management system must process a massive amount of data related to credit card payments. It allows B3 to take advantage of new business opportunities by registering these assets and making the related data available for financing companies.
Payments by credit card amounted to about US$ 300 billion in Brazil in 2021, according to the Brazilian Central Bank. A peculiarity of the country is users pay nearly half their card purchases in monthly instalments.
This creates a cash flow problem for some merchants since they have to wait months to receive their payments. Thus, many sell the receivables at a discount to get their money sooner.
Until last year, a seller could only discount its receivables with financing companies directly connected to the payment acquirer. So there was no competition between financial institutions in this operation, which resulted in significant discounts for the vendor.
The Brazilian Central Bank passed new regulations, which came into force in June last year, requiring all credit card receivables to be registered. These rules also demand that registration entities share the receivables-related data.
These new norms caused a seismic change in the market. “Now sellers can authorise any financial institution to access their data to offer them loans using receivables as a guarantee. This creates competition between financing companies, which is expected to cause a reduction in fees,” explains Carolina Frazatti Benez, Product Manager at Pismo.
The new regulations also created business opportunities for B3. “We realised we could serve companies that were not our customers before, such as acquirers and marketplaces,” says Fernando Bianchini, Product Superintendent at B3.
Bianchini adds that, despite having started processing credit card receivables after other registrars, B3 already has extensive experience with asset management and substantial knowledge about this operation.
Achieving high throughput
One of the challenges of this project is the colossal volume of assets to be processed, which will reach tens of millions daily. Pismo uses advanced cloud-computing technology to meet this performance requirement, including non-relational high-throughput databases and Extract-Transform-Load (ETL) tools.
“Central Bank regulations strictly guide this operation. And any delay in processing could cause catastrophic losses. So we must ensure the system has a speedy response time. To achieve such a high throughput, we had to resort to big data processing tools and techniques,” explains Pedro Correia, Pismo’s technical leader working with B3 in this project.
Besides the credit card receivables registering system, B3 has two other similar applications based on the Pismo platform. The firm uses these two systems to register certificates of deposit and invoices, respectively.
The presentation audio (in Portuguese) is available on the Inovativos podcast: