- Brazilians were able to decide the financial institution that they wanted to receive Brazil’s financial aid;
- As many of those didn’t have any bank registration, they turned to fintechs.
According to Valor Econômico, more than 720,000 users received Brazil’s emergency aid amount using Nubank‘s NuConta. Brazil‘s emergency cash-transfer program was created to mitigate the pandemic effects on unemployed, individual microentrepreneurs and informal workers during the coronavirus pandemic.
Brazilians were also allowed to withdrawal BRL 1,045 ($200) from their FGTS (the Portuguese acronym for “Guarantee Fund for Length of Service,” an obligatory social insurance fund which saves 8% of the worker’s earnings monthly to support them in case of specific eventualities, such as long-term sickness or the purchase of a new home).
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Brazilians were able to decide the financial institution that they wanted to receive Brazil’s financial aid. As many of those didn’t have any bank registration, they turned to fintechs.
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In total, 67.8 million people received the government’s aid, according to the latest figures from the state-owned bank Caixa Econômica Federal. Brazilians received the aid through the Caixa Tem app, created specifically for it. With an eye on this audience, fintechs and digital banks are moving to retain and engage these users, creating new products and services for those who first joined it due to the aid.
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The Brazilian neobank Banco Original has been opening an average of 100,000 new accounts per month, of which 60% are using a financial institution for the first time, according to Valor.
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Conta Zap, which operates through the WhatsApp and Facebook messaging apps, is betting on Brazilians’ familiarity with messaging applications to capture those who have never had access to financial services. To Valor, Conta Zap’s CEO Roberto Marinho Filho said that 40% of the users registered with the fintech to receive the aid.
Mercado Libre‘s financial arm, Mercado Pago, has more than 7 million users that opened the digital account to receive the cash-transfer.