Mônica Rodrigues Ferreira Leite is General Counsel of PayPal Latin America, the regional branch of the world's largest online payment system. In this exclusive interview, Ms. Leite discusses key legal challenges within the digital payments sector, the legal impacts of Covid-19 on PayPal's Latin American operations and what the implementation of open banking and Pix in Brazil means for the country's digital payments sector, amongst other topics.
Leaders League. Since 2010, you are General Counsel of PayPal Latin America’ branch. What are the biggest challenges of heading the Latin American legal department of the largest payment company in the world? And the main advantages?
Mônica Leite. The solutions created by PayPal in recent years have changed the global payment solutions market, blurring the limits between e-commerce and traditional physical commerce. PayPal’s technology and innovative solutions, together with an increasingly complex and challenging legal and regulatory environment, require creative and practical measures from the legal department, which must keep up with this fast-paced rhythm and avant-garde culture.
Undoubtedly, the regulatory challenges are complex, and, in recent years, we have observed a tendency regarding the creation of specific regulations for the payment solutions industry in the region. On one hand, as a legal department, we have the challenge of understanding and ensuring the company’s compliance with these new rules, but, on the other hand, due to our global experience, we have the benefit of actively participating in the drafting of regulatory processes, supporting regulators with advice on the best measures to be adopted.
In Latin America, we also have to deal with the practice of foreign exchange controls which significantly differs from the wider international scenario and requires our attention.
From a legal perspective, what have been the impacts of the pandemic on PayPal’s Latin American operations? And on the wider Latin American digital payments sector?
Given our global profile and due to being a company which encourages remote working in all the markets in which we are present, we did not suffer significant operational impacts. However, the Covid-19 pandemic was, obviously, a challenge. For example, we had to swiftly adapt our team’s set-up to operate 100% remotely. We are experiencing something unprecedented in history, however, we have adapted to this new reality.
Since the beginning of the pandemic, PayPal has frequently carried out internal surveys in order to monitor the impact of remote working and the company’s initiatives regarding the needs of our professionals, business partners and the communities we are a part of. Looking at our results, it seems we are on the right track due to the high levels of commitment and satisfaction shown by all parties, with the majority stating that the measures adopted by PayPal are adequate and expressing confidence in the way in which the company has handled this situation, making all the necessary resources available to ensure the health and safety of our workforce.
It is in this context, that companies such as PayPal, which are connected to the day-to-day of its clients, can and must act. As agents of trust, safe harbors for financial data and spokespersons for an increasingly interconnected world.
From a legal and regulatory standpoint, what will be the impact of open banking and Pix on the digital payments sector?
On one hand, open banking empowers clients by making them responsible for their own data within the financial and payment systems, increasing the possibility that they might receive more attractive and competitive offers for financial products. On the other hand, Pix creates an important paradigmatic shift by allowing that digital transactions take place in real-time, via a platform that will be available 24 hours a day, 7 days a week.
With regards to open banking, from a legal standpoint, one of the main challenges will be operating with the consent of clients specifically regarding the information which they wish to share with other market players, in a context of a newly enacted Brazilian General Data Protection Law (LGPD) and cybersecurity norms. Additionally, the governance of open banking regarding the exchange of information and the relationship between several financial and payment institutions, which includes quite heterogeneous players, is another challenge to be overcome.
In Pix’s case, however, the mechanisms to be adopted for fraud prevention, dispute resolution between members and respective clients, customer service and pricing methodology, are some of the challenges which could face legal and regulatory obstacles.