Brazil-based exchange broker Frente Corretora de Câmbio (The Front Exchange) has launched its fintech collaboration with San Francisco-based startup Ripple. The new blockchain platform, Simple, is designed to allow people in Brazil to send money abroad without the high fees and the slow transaction times that are common among traditional payment rails.
The team behind Simple aims to deliver a robust cross-border remittance solution for everyday Brazilians, such as families with students abroad who are studying and need to receive money to cover basic living expenses.
As the “Transferwise of Brazil”, Simple would allow exchange correspondents that are linked to the Front to become “exchange fintechs” through their own customizable website.
The official announcement was made on Wednesday at the StartSe Fintech Conference 2019 in São Paulo where 2,299 participants and 54 startups convened to discuss the advancements of open banking.
Speaking on a panel at the conference, Fernando Fujiwara, vice president of the Innovation Fund at Softbank, a Japanese conglomerate and Ripple partner, says that 60 to 70% of the company’s Latin America fund of $5 billion should flow to Brazil because of the immense opportunities to transform the banking industry and people’s lives, and because of the tangible support for fintechs from investors and regulators alike.
According to StartSe,
“About 453 fintechs operate in Brazil, a country where almost half of the population is unbanked. More than 1 billion reais were invested in these companies during 2018. Even with these large numbers, 41% of fintechs are still waiting for funding, which shows the potential of this market for 2019, with more unicorns emerging.”
StartSe reports that 85% of the money circulating in Brazil is controlled by five banks, according to Fabio Neufeld, founder of Kavod Lending and member of the Brazilian Association of Fintechs, ABFintechs.
The Ripple-powered, no-fee Simple platform will allow users to avoid high banking fees for small remittances of up to $3,000. By registering for an online account and passing a quick verification process, users can send remittances that are settled within seconds, reports news outlet Exame.
Founder Carlos Brown promises that the company won’t need to behave like a big financial institution that ends up “swallowing a very large part of the value.”
“We want to win with a high amount of transactions and not with a very high spread, like traditional financial institutions.”
The Front is the 15th largest currency brokerage in the country and is authorized to operate by the Central Bank of Brazil.