Brazilian government plans to
cap interchange and other card fees are to be hurried through
by the end of June, according to reports.

The announcement from Brazil’s Justice
Minister Luiz Paulo Barreto surprised the industry and also
the financial markets. The share price of Cielo and Redecard, the
country’s two main processors, lost 10 percent of their value on
the Bovespa, Brazil’s stock exchange shortly after the message.
Baretto said in an interview with Bloomberg that the government
would also focus on increasing transparency in customer invoices
and reducing fees charged to consumers using cards.

Barreto argued the regulations are required to
protect more than 30 million people who have emerged from poverty
and now have access to credit and mobile phones for the first

If enforced, the changes would come as a
blow to Brazilian banks who have recently stepped up their
investment in credit cards, according to analysts. But Barreto
claims self regulation in the industry “is not enough” and
that the push for tighter control over credit card fees is a
response to consumer complaints.

The National Monetary Council is currently
reviewing the proposed measures and has said it will try to reach
an agreement with the Brazilian Association of Credit Card and
Service Companies (Abecs) in order to avoid imposing more stringent
regulations in the future.

A statement from Abecs said: “[Abecs] reiterates its willingness to contribute in all that is necessary
to make sure the sector continues to develop in a fair way.”