BRASILIA (Reuters) – Brazil’s government has dealt a setback to new entrants hoping to capture a larger share of the concentrated meal voucher market by delaying regulations for its long-awaited opening by one year.
The move marks a blow to companies looking to benefit from a law passed in September 2022 that allows workers to move their meal credit between providers and spend it at any participating restaurant.
The “portable” and “interoperable” system was initially scheduled to begin in May, but the new rules were still pending regulation. However, an executive order published on Monday in the official gazette established they will be valid from May 1 of next year.
The 150 billion reais ($30 billion) voucher market is currently dominated by Sodexo, Edenred subsidiary Ticket, and privately held rivals Alelo and VR.
But recent regulatory changes have opened up opportunities for technology-enabled competitors to enter the market, including delivery company iFood, Mercado Libre’s payments unit Mercado Pago, fintechs Caju, Swile and Flash, as well as payment company PicPay.
As Reuters previously reported, the Finance Ministry and the central bank have been at odds over how to regulate the new system, with the central bank resisting due to a lack of staff and fears that transferring voucher credits could create new barriers to entry by requiring substantial investments in operations.
A source familiar with the discussions, who requested anonymity due to the talks’ private nature, said the postponement was the outcome of government ministries being unsuccessful in persuading the central bank to implement the regulation.
The central bank did not respond to a Reuters request for comment.
($1 = 4.9984 reais)
(Reporting by Marcela Ayres; Editing by Chizu Nomiyama)