Why Payments Are the Real Battleground in Brazil's Regulated Betting Market

In Brazil, the regulator sets the available payment methods, leaving operators with little room to work with. That single fact reshapes fraud prevention, product design, and even how deals get valued.

Why Payments Are the Real Battleground in Brazil's Regulated Betting Market

It's halftime, the score is tied, and a bettor wants to place a live wager before the second half kicks off. They copy a Pix code, leave the app, open their bank, paste, confirm, and try to get back in time. Multiply that six-step detour by every deposit, every match, every operator in the country, and you start to see why payments in Brazil are a regulatory instrument that shapes who wins and who loses in this market.

That's Matheus de Albuquerque’s world. As Head of Legal at Paag, a payments technology company operating in Brazil's regulated fixed-odds betting market, he handles payment regulation, compliance with Law No. 14,790/2023, anti-money laundering, data protection, and corporate transactions. In this interview, he explains why payments deserve a seat at the table from day one, and what founders get wrong when they treat payments as an afterthought.

Q: What surprises international operators most when they start operating in Brazil?

A: The biggest surprise is that, in Brazil, payment methods aren't just a commercial decision made by the operator - they're also a decision made by the regulator.

The Secretariat of Prizes and Betting (SPA) restricted deposits and withdrawals to Pix, TED (wire transfer), debit or prepaid cards, and internal book transfers, and expressly banned cash, boletos, checks, credit cards, any post-paid instrument, and crypto-assets. On top of that, the registered account must belong to the bettor themselves. As a result, much of the acquisition architecture operators use abroad simply can't be replicated here.

The second surprise is timing. Money moves in and out in real time and almost irreversibly, with transactions processed in seconds. There's no chargeback cushion here: fraud losses are realized, not disputed through fast-track mechanisms.

Q: What payments-related decision have you seen transform an operation?

A: The decision to move the deposit out of the banking app and into the product itself.

The market standard is still Pix copy-and-paste or QR code. The bettor copies a code, leaves the platform, opens their bank app, pastes, confirms, and comes back. That's six steps, and each one loses people. In sports betting, deposits almost always happen during the match, in a window of seconds. Whoever leaves the app at halftime often doesn't come back.

The alternative already exists and is being adopted. Through payment initiation via Open Finance, the bettor links their account once and, from then on, confirms payment with biometrics - no code to copy, no redirect, no login.

What changes isn't the processing fee. It's the deposit completion rate. Many operations spent years negotiating cents on processing costs while losing far greater volume to friction in the funnel itself.

It became clear that payments weren't competing with the bank. They were competing for the bettor's attention during the match.

Q: At what point do payments stop being an operational area and start influencing business growth?

A: In Brazil, this happens earlier than in other markets, because payment instruments are set by If regulation, not chosen by the operator.

If every competitor has exactly the same instruments available, nobody competes on payment method. They compete on execution. Deposit approval rate, time to withdrawal settlement, and antifraud false-positive rate become conversion and retention variables, not operational ones.

There's a second, less-discussed inflection point. Payments are where the regulator effectively sees the operation - through financial flow, transactional data, and account segregation. As a result, payment architecture determines regulatory risk, and regulatory risk determines valuation. In M&A transactions in this sector, payment service provider contracts and the design of the financial flow are among the items that most reprice a deal.

By the time the board starts looking at payments through that lens, the function has long since stopped being operational.

Q: How has your view of fraud and player experience changed over the years?

A: I used to see the relationship as a dilemma: more control on one side, less conversion on the other. Today I understand the problem isn't about the amount of control, but where that control sits within the flow.

What changed my thinking was the practical consequence of operating on an irreversible rail. Without chargebacks, the fraud vector shifts from just the transaction to the identity and the account. In practice, that means account takeover, use of third-party accounts, and circumvention of self-exclusion. If the vector lives in registration and behavior, the control needs to live there too - not only at the moment of payment. The side effect is positive: placing control in the right spot makes the transaction itself frictionless.

The second shift was moving to measure anti-fraud policy by false positives, not just avoided losses. A wrongly blocked withdrawal isn't an operational cost. It's a complaint, a consumer-protection case, a lawsuit, and, at scale, reputational damage. Because of that, every hold needs to be justified and documented at the moment it happens, since the decision will be reviewed by third parties - and reviewed on paper.

Q: What advice would you give someone designing an operation from scratch?

A: Design payments alongside the platform, not after it. That's the most common and most expensive mistake.

Payments are usually treated as an end-of-line integration item - something you plug in once the product is ready. But payments have their own critical path, which involves selecting an authorized institution, conducting due diligence, negotiating contracts, integrating technically, and obtaining certification. None of these steps depends solely on the operator, and none of them compress well.

There's a second reason, more important than timing. Payment rules define product decisions that, if discovered late, can no longer be changed cheaply. The account-ownership requirement shapes the registration flow. The ban on credit and post-paid instruments eliminates entire acquisition models. Settlement within minutes forces anti-fraud decisions to happen in seconds, not in manual review the next day. Fund segregation determines the treasury plan before the first deposit ever lands.

So, anyone who designs the platform first and fits payments in at the end discovers these constraints at the worst possible moment - when the product has already been built on assumptions the regulation doesn't allow.

Matheus de Albuquerque Schulhan Vidal is Head of Legal at Paag, a payments technology company operating in Brazil's regulated fixed-odds betting market. He works on payment regulation, compliance with Law No. 14,790/2023, anti-money laundering prevention, data protection, and corporate transactions. He is a member of the Gaming and Betting Law Commission of the São Paulo Bar Association (OAB/SP) and was recognized as Emerging In-House Lawyer of the Year at the Legal Honor 2026 awards, in the Banking & Finance and Corporate/Commercial & Technology categories.