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EBANX has reached a commitment term with the Central Bank of Brazil

EBANX has reached a commitment term with the Central Bank of Brazil


Public document released by the Central Bank describes measures to be taken by the company in order to disproof malpractices

Ebanx, a payment company headquartered in Brazil that connects global businesses to Latin American consumers, has signed a commitment with the local Central Bank to immediately cease activities that were under investigation by the government body. 

This term of commitment, signed by both parties, was published in the local Central Bank website, describing an agreement to stop and/or correct practices mainly linked to foreign exchange operations. Although the document does not imply a recognition of guilt by Ebanx, it expresses a commitment on their end to stop and correct actions under scrutiny by the Central Bank since 2018. The goal is to end possible violations of Brazilian financial regulations and to stop harmful impact on the Brazilian payment system, including merchants and consumers; it is also a manoeuvre from the Bank to compel the payment company to cooperate with the investigations against them. Once the conditions are fulfilled the investigation will be archived.

Among the other required actions the company will have to effective immediately: not offer or perform currency conversion to be settled in their client's payment accounts abroad; abstain from performing foreign exchange transactions without the Brazilian end customer having actually acquired a good or service from abroad; abandon activities that are exclusive to authorised agents by the Central bank; and provide to their banking partner the due information about the global business processing payments on their platform.

Ebanx is also required to make a contribution of USD 200,000 to the Central Bank during the 30-day deadline set to implement the government's demands. During this time, the company is directed to hire an independent auditor who will be responsible to determine if all the conditions were met. A negative conclusion could make the payment processor liable to penalties in the form of fines, administrative and judicial orders to ensure execution of obligations and resume of investigations.  

This recent move from the Central Bank reflects an effort from the Brazilian Government to modernize its exchange market and to curb conducts that could lead to unlawful practices or deviation from the good practices followed by the majority of players in the cross-border payments industry operating in that country. 

Source: Banco Central do Brasil

Statement from Ebanx:


Information on Administrative Proceedings before the Brazilian Central Bank

February 2020

EBANX mission is to enable Latin American customers to have access to a wider range of products and services from abroad, as well as helping global merchants thrive in the Latin American business environment.
As a Fintech, EBANX has always prioritized transparency with high standards of compliance and customer support, providing the best service and excellence for our clients and partners.
As one of our leading values is transparency, this communication serves to clarify the Administrative Proceedings with the Central Bank of Brazil that involved EBANX.

In the course of routine auditing to which any regulated entity is subject to, the Central Bank of Brazil had detected a specific product that, at the time, was offered only to end-users. The aforementioned product was called “EBANX Account,” and such terminology, on the point of view and interpretation of the auditor appointed by the Central Bank of Brazil, could be misunderstood as a deposit account typically offered by a Bank, potentially causing confusion to the consumers as to its use primarily was an EBANX reimbursement platform and not a deposit account for financial movement.
Thus, the appointed auditor decided to establish the appropriate Administrative Proceeding to investigate the product further. It should be noted that this procedure is not recognized as an accusation or actual imputation, but a mechanism used by the regulator to run a more thorough assessment aiming to gather information from the involved party, which in this case was EBANX.

In the course of such procedure, EBANX fully cooperated with the Central Bank of Brazil and was able to successfully demonstrate that their first conclusion in regard of the product was not accurate, even though EBANX could understand the auditor's point of view on how the name and processes related to this specific product could lead to misinterpretation. EBANX full cooperation has given us the opportunity to present our case and adjust to the regulator's expectations for marketing such a product, and that has resulted in a greater potential in better serving our merchant's customers, who are so dear and valuable to EBANX.
The outcome of the Administrative Proceeding followed EBANX's proposal: to change the product's name, as well as some features related to it. To further resolve the matter so EBANX can offer such a solution to consumers, the parties executed a Commitment Term ("Termo de Compromisso") in which EBANX undertakes some obligations on strict compliance to the regulator's demands, settling and closing the Administrative Proceeding. Following the Commitment Term ("Termo de Compromisso"), EBANX has already changed the product's name, which also now is offered to EBANX customers.

It should be emphasized, though, that the Administrative Proceeding is a prerogative commonly used by Brazilian regulators in various segments and it does not implicate any guilt assumption or even a formal imputation. Nevertheless, it is known that these procedures can linger for years, and that would have been the natural course of it if EBANX had decided to discuss the merit of the question until the Central Bank of Brazil could finally find some assurance on the matter. An alternative and more expedited way to manage the situation is to immediately address the auditor's concerns, through celebrating a Commitment Term ("Termo de Compromisso").

In a practical manner, it means that EBANX is committing to cease the former conduct and advancing the closure of the Administrative Proceeding, not facing its merit. On the particulars of the financial settlement mentioned in the Commitment Term ("Termo de Compromisso"), it does not constitute a fine or sanction, but a compensation based on some earnings arising from the period the product was offered in a controversial manner.
To clarify, EBANX stands with no further implications or pending issues with the Central Bank of Brazil, on this specific matter or any others related to our operations. Hence it allows us to maintain our offering an ever-growing set of products and solutions through our group of companies.
The most important is that through it all, the payment processing services to international merchants provided by EBANX is fully ratified by the regulator without any mention or findings on the customary auditings made early since 2011.
We reaffirm that, since it was solely related to a consumer product, there is no impact on the payment processing services rendered by EBANX to international merchants.
EBANX will continue to keep its transparency high ethics as they are core values of ours and I am personally available if there is a need for further clarification on this topic.


Wagner Ruiz
Co-founder and CFO EBANX Ltda.

Source: Ebanx Website

Article updated: 29.02.2020

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