Brazil’s Fintech Revolution Built Access at Scale. Now It Faces the Cost of Speed

Brazil has become the most important laboratory for digital finance in Latin America – perhaps the world. In just four years, Pix turned Brazil into a cashless pioneer – but also a testing ground for cybercrime tactics. What happens when 150 million people are brought online before the guardrails are built?

The same speed that built inclusion has now accelerated its risks. In this crucible of progress, systemic threats have begun to emerge.

Pix: Infrastructure That Changed a Nation

In late 2020, the Central Bank of Brazil launched Pix. More than an instant payment system, it became a public utility for digital life – and an alternative to global payment systems. By the end of 2024, 156 million people and over 15 million businesses were using Pix. It processed nearly 68.7 billion transactions that year – worth close to $5 trillion. That’s more than the country’s entire GDP.

Pix replaced cash, overtook debit cards, and reshaped everyday financial behavior. It also gave fintechs a seamless way to build products on top of real-time rails. Public infrastructure created a private innovation boom.

Inclusion at Scale, But Not Yet in Depth

Between 2017 and 2024, Brazil cut its unbanked population by more than half. Today, over 84% of adults have access to a bank account. But this inclusion is often shallow. Many first-time users entered the system not by choice, but through necessity – like during the pandemic, when government emergency aid drove millions to open digital accounts.

Neobanks like Nubank (105M users), Mercado Pago (50M), and PicPay (36M) surged in adoption. But access to digital finance is only the first step. Financial literacy and resilience have lagged behind.

The Rise of a Digital Criminal Economy

Wherever there is digital scale, fraud follows. Brazil is now facing an epidemic of cybercrime. The same frictionless tools that powered inclusion are now being exploited by professionalized fraud networks.

Criminal groups have moved from the streets to the screen. Fraud cases quadrupled between 2018 and 2023, while physical robberies dropped. Fraud is now Brazil’s most common property crime.

• Every 16 seconds, a new bank fraud case is reported in Brazil

• 94% of the population has faced at least one digital scam attempt each month

• Losses from fraud reached R$297 billion in 2024

Probably every Brazilian can share a story about themselves – or someone they know – being a target of a financial scam. Like what happened to my friend recently. He saw a tempting ad on Instagram: “Pre-approved credit of R$8,000.” He filled out a form. Then came the request for a “deposit release fee” of R$500. After paying, he never received the promised amount.

The methods are getting increasingly sophisticated. Deepfake audio scams, fake bank call centers, and cloned WhatsApp accounts now operate at industrial scale. Organized crime has discovered that digital fraud offers lower risk and higher return than traditional crime.

Over-Indebtedness: The Shadow of Inclusion

Access to credit has been another hallmark of Brazil’s fintech revolution. But it has created a paradox: as more people gain access to loans, many fall into unmanageable debt. The culture of borrowing outpaced the culture of planning.

• Over 78% of households report having outstanding debts

• 29.5% are in default

• 30 million Brazilians have 100% of their monthly income committed to debt payments

The term "superendividamento" – over-indebtedness that threatens basic subsistence – has entered public policy. The 2021 Over-Indebtedness Law (Lei do Superendividamento) to protect vulnerable borrowers and preserve their "mínimo existencial" (essential income). But enforcement has struggled to keep pace with market forces.

The Path Forward: Strategic Imperatives for a Resilient Digital Economy

Brazil’s digital transformation has achieved scale – but now faces a sustainability test. To preserve the benefits of financial innovation while reducing systemic risk, stakeholders must act on four fronts:

1. Strengthen Collective Fraud Defenses

• Enable real-time sharing of fraud signals across institutions (as outlined in BCB Resolution nº 6)

• Invest in behavioral analytics and device intelligence to detect manipulation (e.g. distracted or rushed user behavior)

• Apply “positive friction” to high-risk actions – such as BCB’s 30–60 minute delay for suspicious Pix transactions

2. Treat Fraud as a National Security Issue

• Scale and fund cybercrime units focused on digital forensics and organized financial fraud

• Accelerate legal reforms like PL 4.161/2020 to close prosecution gaps and raise penalties

• Mandate cross-sector collaboration with telecoms, e-commerce, and social platforms to cut off fraud vectors at the source

3. Build Long-Term Financial Resilience

• Make responsible lending a core business priority, not just a compliance measure

• Design products that support budgeting, saving, and structured debt recovery

• Enforce and streamline over-indebtedness protections (Lei do Superendividamento)

• Integrate financial education into school curricula and key financial milestones

• Regulate aggressive credit marketing targeting vulnerable populations

4. Embed Risk Management into Innovation

• Ensure that Drex and future technologies like DeFi are launched with built-in safeguards – not retrofitted later

• Make risk resilience a first principle of product and infrastructure design

Brazil’s leadership in digital finance is clear. The next step is ensuring it can last – securely, responsibly, and at scale.

What Brazil Teaches the World

Brazil’s case is not unique. Other countries embracing rapid digitalization will likely encounter the same tensions: between access and risk, between scale and trust.

The Brazilian experience underscores some strategic imperatives:

• Access without safeguards becomes exposure – onboarding millions before building trust infrastructure creates systemic vulnerabilities.

• Inclusion must go beyond onboarding – financial access without education or planning leads to over-indebtedness and instability.

• Trust must be engineered, not assumed – secure systems require proactive fraud detection, not reactive cleanup.

• Legal and regulatory frameworks must evolve in parallel with innovation – otherwise, criminals exploit the lag.

• Public infrastructure can drive private innovation – but only if risk management is a foundational layer.

• Cross-sector collaboration is essential – telecoms, platforms, and financial services must jointly defend against fraud vectors.

Conclusion: Brazil at the Crossroads

Brazil's digital journey has been bold, fast, and largely successful. But it now stands at a crossroads. Either the ecosystem evolves toward sustainable, secure, and inclusive growth – or it risks eroding the very trust that made its transformation possible.

What was meant to be the decade’s greatest achievement – digital credit in just a few clicks, 24/7, for any Brazilian with a device – has become fertile ground for fraudsters. In the rush to “release instant credit,” we skipped validation layers and outsourced the risk to the user’s good faith.

In that gap between convenience and carelessness, scams flourished – like my friend’s “instant” loan, for example.

Today, fraud no longer appears at the cashier’s desk. It hides in code, rooted devices, masked VPNs, and the superhuman cadence of bots. Each field removed from an onboarding form opens another point of vulnerability.

That’s where solutions like JuicyScore become essential. Detecting, in milliseconds, a newly created domain, an intercontinental IP jump, or the invisible root of an Android device is not a luxury — it’s the cost of ensuring that the dream of inclusive credit doesn’t turn into a nightmare, for both customers and those carrying the risk on their balance sheets.

Democratizing credit remains vital to Brazil’s future – but it will only be sustainable when built on an invisible layer of trust. The past few years have proven what’s achievable. The priority now is to invest in resilient structures that endure.