Payments, regulation, and banking barriers: Leonardo Baptista on iGaming transactions
BiS SiGMA Americas 2025 is cementing itself as the epicentre of the most relevant discussions for the iGaming market in Brazil, bringing together experts and industry leaders to debate the challenges and opportunities of regulation. In a landscape of intense transformations, topics such as payment innovation, compliance, and the role of financial institutions are essential to ensuring a secure and sustainable environment. At the helm of Pay4Fun, one of Brazil’s leading payment companies specialising in iGaming, Leonardo Baptista closely monitors the impacts of regulatory changes and the barriers imposed on the sector. With a strategic vision of the challenges faced by operators and users, he has become one of the most prominent voices advocating for a more accessible and transparent financial environment for iGaming.
In this interview, Lygia Rodrigues, Head of Conferences at BiS SiGMA Americas, speaks with Leonardo Baptista, Ambassador of the “Financial Frontiers: Present and Future of Payments in iGaming” segment, to discuss the key obstacles faced by betting companies in Brazil. Topics include major banks’ restrictions on processing PIX payments, the impact of illegal operations on the industry’s reputation, and the role of regulatory authorities in building a more efficient financial ecosystem for iGaming.
Lygia Rodrigues: Leonardo, it is a privilege to have this conversation with you, especially at such a decisive moment for the industry. The impact of new regulations and the challenges faced by payment companies have sparked heated debates within the sector. There is no one better than you, being at the forefront of this scenario, to provide valuable insights into the future of iGaming transactions.
1. The Impact of Regulation on Payment Methods
Lygia Rodrigues: The regulation of the iGaming market has been a long-awaited advancement and promises to transform the sector. In your view, what are the main advantages of this new scenario for payment methods?
Leonardo Baptista: The regulation of the iGaming market brings a series of significant benefits for payment methods. One of the main positives is the creation of a safer and more transparent environment, essential for ensuring trust among both bettors and operators. By establishing that only financial institutions authorised by the Central Bank, such as regulated payment providers, can operate in the sector, the government ensures greater traceability and control of financial transactions. The use of systems like PIX, for instance, facilitates real-time transaction monitoring, making it more difficult for fraudulent activities or money laundering to occur. One of the key aspects of this control is verifying the origin of deposits and withdrawals, ensuring that all funds follow transparency and compliance criteria. Additionally, regulation promotes uniformity in practices, helping to reduce the risks of illegal operations and fostering a more stable and reliable market.
Lygia Rodrigues: A regulated environment tends to provide greater financial security and transaction transparency. What still needs to be done to ensure this promise becomes a reality?
Leonardo Baptista: For regulation to yield the expected results, rigorous and effective oversight is essential. The Secretariat for Prizes and Betting (SPA) and the Central Bank must work together to ensure that only licensed companies operate in the market, applying clear sanctions to those who fail to comply. Additionally, there must be an efficient communication channel between regulators and industry players, allowing for necessary adjustments and improvements. With active monitoring and a well-structured regulatory framework, the iGaming market can develop in a secure and transparent manner. These measures are fundamental to ensuring the healthy development of the iGaming market, maintaining public trust, and combatting fraudulent practices.
2. PIX as a Catalyst for the Betting Market
Lygia Rodrigues: PIX has revolutionised payment methods in Brazil and has become the preferred choice for bettors. How has this technology helped boost the iGaming market?
Leonardo Baptista: PIX has transformed financial transactions in Brazil, offering speed, security, and convenience to bettors. In iGaming, it has become the primary payment method due to its instant transfers and 24/7 availability, eliminating traditional banking barriers.
Lygia Rodrigues: Despite its popularity, PIX still faces challenges in the sector. Do you believe it will remain the primary payment method for betting, or could new solutions gain traction?
Leonardo Baptista: Despite facing some challenges, PIX will likely continue as the primary payment method for betting. Its agility and real-time monitoring capabilities make it ideal for enhancing security and traceability, which are crucial in combatting fraud and illicit activities. Furthermore, with the backing of the Central Bank and its integration into Brazil’s financial system, PIX provides confidence for both operators and consumers.
Of course, new solutions may emerge over time, as the payment sector is constantly evolving. However, given the current landscape and the crucial role PIX already plays, it will remain the top choice for betting in Brazil, particularly due to its transparency and compliance with regulations.
3. The Role of SPA and the Central Bank in Combatting Illegal Operations
Lygia Rodrigues: The role of SPA and the Central Bank in tackling illegal operations has been gaining traction. How can this oversight help strengthen the regulated market and ensure a more competitive and fair environment?
Leonardo Baptista: Effective oversight by the Central Bank and SPA is crucial for ensuring fair competition in the iGaming sector. Blocking financial transactions linked to illegal operators is one of the most effective ways to prevent clandestine activities, enabling the verification of deposit and withdrawal origins. Additionally, regulation helps standardise compliance requirements, creating a more stable market for licensed companies and enhancing consumer security.
Lygia Rodrigues: However, some actions seem to negatively impact licensed companies. Do you think authorities still lack a deeper understanding of how the industry operates?
Leonardo Baptista: Yes, there is still a lack of deeper understanding regarding the specificities of the iGaming sector. Some actions, such as blocking illegal websites, have limited impact, as these sites can easily change domains and continue operating. The focus should be on controlling payment channels, which are the true funding sources for these illegal sites. The Central Bank and SPA have the necessary tools to disrupt these financial flows, such as deactivating bank accounts linked to illegal websites. Moreover, it is essential for authorities to collaborate more closely with industry operators to ensure that regulations are effectively enforced and that licensed companies are not unfairly penalised by poorly understood measures.
4. Banking restrictions: A risk for the regulated sector?
Lygia Rodrigues: Many customers report difficulties when trying to deposit via Pix at licensed betting operators, receiving blocks or warning messages from banks. How do you view this stance taken by financial institutions?
Leonardo Baptista: Pay4Fun believes that financial institutions should not impose generalised restrictions on deposits via Pix at licensed betting platforms. We understand that banks have internal compliance and transaction monitoring policies, but these measures must be applied transparently and proportionally, without negatively impacting customers who wish to place bets on duly regulated platforms.
The betting market in Brazil is undergoing a regulatory process, and it is essential that all parties involved—including banks, operators, and payment providers—act in compliance with the legislation, ensuring security without unduly restricting users’ freedom. As a payment institution authorised by the Central Bank, we follow strict compliance criteria and work to ensure that our customers can carry out their transactions securely and without undue blockages.
Lygia Rodrigues: Doesn’t this interference go against free market principles and consumer autonomy? What can be done to prevent this from harming the user experience and the sector’s credibility?
Leonardo Baptista: Pay4Fun recognises that excessive restrictions could indeed raise concerns regarding free competition and consumer autonomy. Users should have the right to choose where to carry out their transactions, provided these are conducted on properly licensed platforms in compliance with current regulations.
To prevent such restrictions from compromising customer experience and the credibility of the sector, it is essential to align banks, regulators, and companies within the payment ecosystem to ensure that compliance measures do not become disproportionate barriers. The regulation of betting in Brazil brings greater security and transparency to the market, and financial institutions should play a role in facilitating legitimate transactions rather than arbitrarily restricting them.
5. Aligning the financial and betting sectors
Lygia Rodrigues: If traditional banks continue to impose barriers on transactions with regulated companies, could this undermine the effectiveness of regulation?
Leonardo Baptista: I believe that as the market matures, these barriers will likely be reduced, particularly with greater regulatory clarity and the strengthening of compliance guidelines.
One key point banks are overlooking is that by imposing certain restrictions, they are only affecting the REGULATED market while making life easier for those operating illegally. In other words, the stance taken by banks and FEBRABAN (Brazilian Federation of Banks) is counterproductive.
Lygia Rodrigues: What would be the ideal path to a healthy alignment between the banking system and the betting sector, ensuring security and efficiency for all involved?
Leonardo Baptista: The ideal path would be a process of adaptation and collaboration between banks and the betting sector. Banks, although accustomed to simpler e-commerce transactions, need to understand that the betting market has specific characteristics, such as higher transaction values and the need for rapid processing, particularly when it comes to paying out winnings.
A Pix transaction, for example, must be processed almost instantly to avoid issues, which requires banks to adjust to this dynamic. Additionally, there should be more open communication between banks, the SPA, the Central Bank, and sector operators to ensure that security and regulatory rules are clear for everyone.
The alignment between the banking system and the betting sector should focus on transparency, security, and efficiency in transactions, facilitating compliance with regulations and protecting both operators and bettors.
6. The future of payment methods in iGaming
Lygia Rodrigues: The evolution of digital payments is happening rapidly. Which trends do you believe will benefit the iGaming sector in the coming years?
Leonardo Baptista: Pix will continue to be the main payment method in the iGaming sector due to its speed and real-time monitoring capabilities, which enhance security and transparency in transactions.
Furthermore, the introduction of solutions such as ITP (Payment Initiation Service), which allows payments to be initiated on behalf of users, is expected to make processes even faster and safer, benefiting both operators and consumers.
We are also working to strengthen reporting channels with the Central Bank, making it easier to identify illegal operations and ensuring that regulations are effectively enforced. Collaboration between the SPA, the Central Bank, and operators is crucial to maintaining market integrity.
With the regulation of the sector in Brazil, we are moving towards a safer and more responsible market. With rigorous controls, similar to mature markets like the United Kingdom—where regulations help mitigate problem gambling—I believe the sector will continue to grow in a healthy and secure manner.
Lygia Rodrigues: Can we expect traditional banks to become more open to the sector, or will fintech continue to lead payment solutions for iGaming?
Leonardo Baptista: Fintech will remain at the forefront of payment innovation in iGaming. However, as the regulated market matures, traditional banks are likely to begin offering solutions tailored to the sector.
It is worth highlighting the strong work being done by the Central Bank of Brazil with the Brazilian Payment System (SPB), which is one of the most advanced in the world in terms of technology. Those of us who are direct participants in Pix must comply with the regulatory agenda set by the Central Bank.
This means we will continue to bring impactful innovations to the market, such as the potential regulation of cryptocurrencies, the launch of Drex (the Digital Real), and the rollout of Automatic/Recurring Pix. The latter is already in the testing phase, with a “go live” planned for mid-year.
Just imagine—“subscription-based betting” and its impact on Responsible Gambling!
