How fintechs make money

You open a digital account, pay no monthly fee, make Pix transfers (Pix is Brazil’s instant payment system) for free and get a card with no annual fee. The question is inevitable: where does this company’s money come from?

The short answer is that it earns a little from each customer on several fronts at once. Part of it comes from the seller, not the buyer. Another part comes from money sitting idle in the account. And, increasingly, it comes from credit. This article explains each source, what Brazilian regulation limits and what risks each model carries.

Throughout the text, a fintech is a company that, in the words of the Central Bank of Brazil (BC), introduces innovations into financial markets through intensive use of technology. It may hold a bank license, a payment institution license or a credit fintech license. The difference between these types is explained in neobanks versus traditional banks.

Why “free” is not the end of the conversation

Payment services work as two-sided markets: there are payers and payees, and the company can charge one side more and the other less. The BC uses this term in its 2023 Banking Economics Report when describing how payment services are paid for. That is why a card can be free for you and still generate revenue: the one paying, to a large extent, is the merchant.

The same report notes that growing competition led payment institutions to seek to diversify their revenue sources.

Revenue sources, one by one

1. Interchange fee

When you pay by card, the store receives a little less than the purchase amount. This discount is called the MDR (merchant discount rate) and is charged by the acquirer, the company that provides the card terminal. Out of the MDR comes the interchange fee, which the acquirer passes on to the card issuer. The card network’s fee also comes out of it.

For a card issuer, as many digital accounts are, interchange is per-transaction revenue: the more you use the card, the more it earns.

This revenue is capped in Brazil. BCB Resolution No. 246/2022 limited interchange to 0.5% per transaction in domestic purchase arrangements for deposit accounts (debit) and 0.7% for prepaid accounts. The cap has applied since April 1, 2023. The rule does not cover credit cards.

2. Acquiring and prepayment revenue

On the other side of the counter, the acquirer keeps the MDR after paying interchange and the card network. And it has a second important source: receivables prepayment. A merchant who sold in installments can get paid earlier, at a discount.

This carries a lot of weight. According to the 2023 Banking Economics Report, in conglomerates made up solely of payment institutions, prepayment accounted for 51% of payment services revenue in 2023. In conglomerates led by a payment institution that include a financial institution, that share was 2%. The BC explains that the former rely basically on their own capital to fund prepayment and need large transaction volumes to turn a profit.

3. Credit spread

Spread is the difference between what the institution charges borrowers and what it pays to obtain the money. It includes the cost of default, that is, of borrowers who don’t pay.

Credit cards, personal loans and working capital loans earn more per customer than fees and interchange. That is why credit tends to become the core of the model as the customer base grows.

So does the risk. The Central Bank’s May 2026 Financial Stability Report recorded that the digital institutions segment had the largest increase in loan loss provisions in the second half of 2025. According to the BC, this segment operates credit products whose risk materializes more when financial conditions tighten.

Not every fintech can lend with third-party money. A direct credit company (SCD, sociedade de crédito direto) lends only with its own capital or with on-lending from BNDES, Brazil’s national development bank. A payment institution cannot extend credit.

4. Float: the yield on idle money

Float is the gain earned on customers’ money while it sits in the account. At a bank, deposits fund loans. In a prepaid payment account, the rule is different.

BCB Resolution No. 80/2021 requires electronic money issuers to keep the equivalent of customer balances invested only in cash at the BC or in federal government bonds. The 2023 Banking Economics Report lists interest on these bonds among issuers’ revenues. In other words, float exists, but the issuer cannot lend that money. The gain depends on the interest rate: with high rates, it earns more; with low rates, less.

5. Fees

Even with a free account, some services may carry fees, for example: withdrawals beyond a quota, international transfers, currency exchange, card replacement, business packages. Credit fintechs can charge for credit analysis and collection on behalf of third parties. A peer-to-peer lending company (SEP, sociedade de empréstimo entre pessoas) charges fees for intermediating between lender and borrower, according to the BC.

6. Subscriptions

Some accounts offer paid plans with extra benefits, such as a higher-tier card, more free withdrawals or priority customer service. Subscriptions provide recurring, predictable revenue that does not depend on purchase volume. The challenge is convincing customers to pay for something the competition offers at no cost.

7. Marketplace and cross-selling

The app also becomes a storefront. The fintech distributes insurance, investments and partner products and earns a commission. Some open online stores inside the app and earn on sales.

The Bank for International Settlements (BIS) describes the logic that makes this attractive for large platforms (Annual Economic Report 2019, chapter III). More users generate more data, which improve services, which attract more users. Payment data, for example, can feed credit analysis. The same report points out the risks: the platform may favor its own products, and the use of data may lead to price discrimination or exclusion.

8. BaaS: selling the infrastructure

A licensed fintech can make money by providing services to other companies that want to offer accounts, cards or credit under their own brand. This is the model called Banking as a Service (BaaS), explained in detail in the article on embedded finance and BaaS.

Joint Resolution No. 16/2025 requires the contract between the parties to define how they compensate each other. It also prohibits the partner company from charging the customer, in its own name, fees or commissions for the authorized institution’s products. Fees charged to you follow the same rules that apply to any authorized institution.

What the revenue tally leaves out

Revenue is not profit. The IMF study of 37 neobanks in 18 economies found higher operating costs than those of traditional banks, driven by customer acquisition spending, such as marketing, and by compliance (IMF, April 2022). The same study observed that customers’ lower incomes limit sales of insurance, investments and other fee-generating products. And that few neobanks were profitable in that period.

The European Central Bank (ECB), using end-2024 data, found advertising and marketing spending three times higher at digital banks than at traditional ones.

In Brazil, the BC has a two-part diagnosis. Digital institutions have been gaining efficiency: serving one more customer costs little, and revenue grows faster than expenses. In the second half of 2025, this was the segment with the largest gain in profitability. But it is also the one that most increased provisions for credit losses.

Public infrastructure changes the game

Part of the traditional revenue has shrunk because of public infrastructure. A transfer that used to generate a fee can now be made via Pix. And Open Finance lets you take your data to another institution and allows payments to be initiated by third parties. This creates room for new models, such as payment initiators, which, according to the BC, can be paid through a per-transaction fee or by the institutions and platforms that profit from the extra volume.

In our newsroom’s assessment, the combined effect is to push fintechs toward revenues that depend on the customer relationship, especially credit and cross-selling. That is where the margin is, and that is where the risk is.

What this means for you

• The free product comes with a trade-off. It may be card usage, credit offers, the sale of other products or the use of your data, within what you have authorized.
• Easy credit is the core of the model. Compare the CET (Custo Efetivo Total, the total effective cost of credit that Brazilian lenders must disclose) before accepting an offer in the app.
• Knowing where the revenue comes from helps you assess the company. An institution that depends on risky credit is more exposed to default cycles.

Key takeaways

• Fintechs combine several small revenue streams: interchange, MDR and prepayment, credit spread, float, fees, subscriptions, commissions and BaaS.
• In Brazil, regulation limits several of them: an interchange cap for debit and prepaid, prepaid account balances invested only at the BC or in government bonds, and compensation rules in BaaS.
• Because revenue per customer is low, credit tends to become the main source of margin. Reports from the BC, the IMF and the ECB show that this improves results in good times and amplifies losses in bad times.