Open Banking: Know That Credit Card Data May Be Shared | open banking

Information about the credit limit, transactions carried out and invoices are part of the scope of credit card data that will be shared between financial institutions in Brazil through open banking – the Central Bank (BC) system that allows the sharing of customer information between banks, cooperatives, fintechs and other institutions in the sector.

Information can only be shared when authorized by customers – they are the ones who define which data to share, with which institutions and the deadline for this sharing.

  • READ MORE: Open banking: understand what it is and how it works
  • Open banking will create ‘the financial system of the future’, says BC president

The BC defined that financial institutions need to make available in open banking the following data related to credit cards:

  • Limit: Card information, card limit information, total limit, used limit, available limit, limit by credit type.
  • Transactions: transaction identification, transaction amount, dates, merchant identification.
  • Invoices: card brand, invoice information, charges and payment methods.

Cards are the most common form of credit in the country. They usually offer advantages to customers. In general, the best terms are for those with higher incomes who keep money in the bank.

Open banking will facilitate the comparison between banks and the “tug of war” by customers, further democratizing the offer of benefits. Better conditions can be offered, for example, to consumers who are good payers, even with lower incomes.

Restricted Sharing from September 27th

Since the 13th of August, when the 2nd phase of the implementation of open banking began, customers can authorize the sharing of registration data and information about transactions in their accounts, credit card and credit products contracted with financial institutions.

Still, the information referring to credit cards will only begin to be effectively shared from the 27th of September and in a restricted manner. This is because the implementation of this 2nd phase was scheduled by the BC “in order to guarantee security and stability to the process and allow adjustments that are necessary”.

  • See the full list of participating institutions in open banking

Until October 24th, there will be limits on the number of authorizations for sharing, the type of information to be shared and the time when the sharing will take place. See the schedule below for details:

2nd phase of open banking implementation was staggered to ensure security and stability to the process and allow adjustments as needed — Photo: Economia/G1

Benefits for consumers

The Central Bank points out that open banking, by establishing the sharing of consumer banking information between financial institutions, should “favor and benefit the client itself”.

  • See some examples of how open bankin can benefit customers

One of the benefits pointed out by the institution is the possible reduction in the prices of products and services. This is because a bank, for example, can share with another whether the customer is a good payer and whether or not he uses the overdraft.

“We will have products with lower costs and products that are more designed for customer needs, with lower prices and inclusion. We also believe that Open Banking will generate new business models over time and intensify competition”, highlighted the president of the Central Bank, Roberto Campos Neto.

See the main points about open banking and data usage:

  • Sharing is optional: the customer needs to authorize for the data transfer to take place. And, for each new share, a new ok.
  • Consent for data transfer in open banking it has to be done electronically, with clear and accessible language about the purpose, that is, for what purpose they will be used.
  • You data should only go from company A, which may be your current bank, to B, a bank where the customer wants to open an account, for example.
  • past the information usage time limit, which will be a maximum of 12 months, a new acceptance is necessary for the data to be shared again.
  • At institutions need to follow the rules of the General Data Protection Law (LGPD), but there is also a specific regulation of open banking.

READ MORE: Failure to comply with the LGPD can lead to punishments; understand

Understand what Open Banking is

Understand what Open Banking is