Welcome to Fintechland: Why Brazil Is the World's Financial Innovation Powerhouse

Guest Post by Luiz Manzano

caption...

Alex: Globally, certain markets dominate industries. Others are becoming experimentation labs. In fintech, I’d argue that Brazil is a little bit of each. It is home to global powerhouses like Nubank. Yet, a combination of world-leading Whatsapp penetration, government led open-banking regulation, real-time and nearly free payments via PIX, and of course an AI overlay, is creating the potential for business models in the U.S. we can’t yet even imagine.

In this edition of 99%Tech, my good friend Luiz Manzano, GP of Big_Bets (with whom we co-led the Avenia Preseed (the Bridge of Brazil) writes about the fintech ecosystem.

---

By Luiz Manzano

Boston has biotech. Israel dominates cybersecurity. And Brazil? Well, Brazil is fintechland. And if you think this is just excited Brazilian talk, grab a seat because the data—and stories—speak louder.

Take, for example, the rise of Pismo. Founded in São Paulo, Pismo quietly built one of the most sophisticated and scalable banking-as-a-service platforms in the world. In 2023, it was acquired by Visa for $1 billion—one of the largest exits in Latin American fintech history. The cofounder, Daniela Binatti, started her career in enterprise tech and leveraged deep technical insight and relentless focus to deliver for some of the most demanding financial institutions on the planet. Her story isn’t an outlier—it’s a signal.

So what’s behind Brazil’s fintech dominance?

Let's start with Pix, the payment system that became synonymous with instant transfers in less than five years. In 2024, Pix processed an astonishing $4.56 trillion (R$ 26.45 trillion, considering an exchange rate of 5.8 BRL/USD), handling over 63.5 billion transactions throughout the year—a 54% increase compared to 2023. Over 60% of the Brazilian population used Pix at least once a month in 2024, with the Federal District showing the highest adoption at 77%. During Black Friday alone, Pix registered nearly 240 million transactions, moving $22.4 billion (R$ 130 billion) in a single day. With 82% of transactions carried out via mobile devices, Pix is clearly the backbone of Brazil's modern financial infrastructure.

If Pix leads in popularity, Brazilian Open Finance takes the crown as the "largest open financial ecosystem on the planet." By 2025, more than 60 million active consents and over 2 billion integrations highlight a massive leap in financial inclusion, surpassing the US and Europe by a wide margin.

Financial market giants? Brazil has plenty. Nubank, born in Brazil, now surpasses Itaú in market value and serves over 110 million customers across Latin America. It’s the region's first digital bank to achieve this milestone, firmly positioning Brazil on the global fintech map. And the growth doesn't stop there: Stone, PagSeguro, and a new generation of fintechs such as Ume, specialized in Pix-based credit; BRLA, at the forefront of the stablecoin revolution as Brazil moves closer to regulatory clarity; and Conta Simples, simplifying financial management for entrepreneurs—are all building robust businesses, many listed on international stock exchanges.

Speaking of money, venture capital continues to flow strongly into Brazilian fintechs. In 2024 alone, $1.55 billion (R$ 9 billion) was invested. Even as the global economy slows down, Brazil speeds up. Investors place big bets on local fintechs, confident that solutions developed here will soon be replicated worldwide.

But Brazil isn’t just growing—it’s uniquely positioned. A few preconditions have turbocharged this ecosystem:

• A massive TAM: With over 200 million people and a historically underbanked population, Brazil offers scale that few fintech markets can match.

• Mandatory e-invoicing laws (Nota Fiscal Eletrônica): These created a standardized, digital trail of B2B commerce—fertile ground for credit underwriting and receivables financing startups.

• WhatsApp penetration: Brazil is one of the top WhatsApp markets globally, making it a powerful channel for onboarding, engagement, and even payments.

• A modern, progressive central bank: The Central Bank of Brazil isn’t just tech-friendly—it leads innovation, from Pix to Open Finance to the forthcoming Drex digital currency.

These foundational elements haven’t just made fintechs grow—they’ve changed how society operates. For instance, digital inclusion has had downstream effects in unexpected places. Small business owners in the favelas of Rio can now receive instant Pix payments and qualify for credit based on verified transaction history. Informal workers once paid in cash can open digital accounts in seconds and access government subsidies during crises.

It’s also influencing education and employment. As fintech adoption rises, so does the demand for digital skills. Universities and bootcamps now offer specialized tracks in fintech, compliance, and data science. Many founders of Brazil’s top startups are under 35, and many of them come from nontraditional backgrounds. Fintech is no longer just a sector—it’s a pathway to social mobility.

International platforms are taking notice too. Global banks and payment networks are partnering with local players to expand services. Visa’s acquisition of Pismo is just one example. Stripe, Adyen, and others are either investing in or collaborating with Brazilian infrastructure providers to tap into local expertise. These partnerships reinforce Brazil’s status not just as a local powerhouse but as a global hub of fintech innovation.

What about the future? Brazil’s fintech stack is now the baseline for a new generation of apps and services. We’re seeing fintech become embedded in everyday tools—CRMs that issue invoices and reconcile payments automatically, e-commerce platforms that integrate real-time settlement, and accounting tools built around Pix-native architecture. Drex, Brazil’s planned CBDC, will likely add another layer of programmable money to this foundation.

And that leads to a broader point: why should anyone outside of Brazil care?

1. Brazil is a preview of what’s to come. What’s happening here foreshadows global fintech trends. The success of Nubank, Pismo, and others has already inspired a wave of founders and investors asking, "Who's building the Nubank of Africa? The Pismo of Southeast Asia?"

2. A new generation is building on this stack. Jota.ai combines WhatsApp ubiquity, Pix, Open Banking, and AI to create novel financial services from the ground up. Iniciador, another standout, leverages new initiation rails to power seamless B2B payments. These aren’t just Brazil plays—they’re blueprints for fintech infrastructure everywhere.

3. There are lessons for every ecosystem. Bold regulatory moves, public-private collaboration, and modern infrastructure can dramatically accelerate financial inclusion. Other markets would do well to study—not just admire—Brazil’s approach.

4. It’s not just innovation—it’s resilience. Brazilian fintechs have been forged in a challenging macro environment, with high interest rates, inflation, and currency volatility. That’s made founders battle-tested, products more efficient, and go-to-market strategies more disciplined.

Brazil offers not just a vision of fintech’s future, but a playbook. From regulation to user behavior, from infrastructure to imagination, it’s showing the world what’s possible.

Next time someone asks why Brazil is the fintech capital of the world, you’ll know exactly why: the data speaks loud and clear, and the financial future is already here.