Writing for Payment Expert, Leonardo Baptista, CEO and co-founder of Pay4Fun, discusses the growth of online betting and why it is necessary to focus on user security in every regulatory step Brazil takes. 

With the growth of online gambling sites, consumers are increasingly concerned about their security when making transactions. According to Brazil’s Minister of Finance, Fernando Haddad, in an interview with GloboNews, it is estimated that the sector generates between 12-15bn Reals in taxes. This value shows the importance of the online betting market in Brazil and reinforces the need to guarantee the safety and protection of those operating in the space.

However, not all companies that offer this type of service have the same security and protection guarantees. That is why it is essential that companies look for institutions regulated by the Central Bank of Brazil, such as Pay4Fun, the first authorised payment institution operating in the online sports betting and entertainment sector, which moved 2.4 billion in 2022 and meets all the requirements and obligations established by the agency (BACEN), to provide security in the provision of payment services to its customers.

The advantages of companies in offering a regulated institution is the high diligence for the prevention of financial crimes, including PLD (prevention of money laundering), under which we follow the rules and regulations determined by the regulator. 

Pay4Fun’s customer registration process is entirely digital, in addition to having KYC (Know Your Customer), ensuring that all users undergo a rigorous evaluation by the Risk and Compliance team when opening an account and throughout your experience as a fintech customer. They also have data protection mechanisms, which follow the directions of the LGPD (General Data Protection Law).

In addition, the allocation of resources with reserve accounts at the Central Bank or federal government bonds benefits merchants by offering liquidity, integrity and, above all, security of resources. Licensed institutions have robust risk management structures in place, effectively controlling any damage to their operations and providing a high level of service for routine transactions. Another point is the care with the continuity of the business documented and presented to the regulator and to the auditors. These plans ensure the evolution of the provision of Pay4Fun services, without impacting customers, partners and users, who already have more than 1 million on its platform.

To reinforce our concern for security, I have highlighted below the main risks of operating with an unregulated financial institution:

1- Lack of security and consumer protection guarantees: they do not have legal obligations and security standards established by the Central Bank.

2- Lack of attendance: In case of financial problems, the Central Bank may not have the ability to help clients, leaving them without assistance.

3- Lack of compulsory patrimony: bringing uncertainty about the financial capacity of the company and the continuity of its operations, which can directly impact the client and their deposited funds.

4- Lack of anti-fraud diligence and PLD: they do not have the obligation to know the client and the origin and destination of the funds of the transactions, generating fragility in the financial ecosystem.

5- Low level of risk management: they do not have the same risk management obligations as the company and the client.

So, you need to be careful: when choosing a partner for your operations, make sure that it is a regulated company that offers you security in the first place, such as Pay4Fun.