Digital credit cards are the new craze among smartphone users. Without annual fees, they attract young people, who do everything on their cell phones and do not want to pay any fees just to have a card. The easy way to order online, without having to go to a physical agency or send paper documents, is another decisive factor for the growing adhesion to the service.
Since the launch of Nubank, in 2015, the Brazilian market has seen the proliferation of digital bank applications offering credit cards without annual fees. Agibank, Credicard Zero and Pag are some of the main names that have been helping to change the behavior of customers of credit institutions. Next, the dnetc made an overview to explain better about these types of services and their advantages.
Digital credit cards: no annual fee and procedures completely online Photo: Divulgao / Credicard
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Physical card vs. virtual card
When it comes to digital credit card, the most common mistake is to confuse it with a virtual credit card. Although they have almost the same names, the services are different. What is called a digital card is a common, physical card, just like the one you already have from your bank.
The difference from digital to traditional cards is mainly in the form of ordering, which is all online. In addition, the aforementioned absence of maintenance fees is a feature common to all services of this type. But the appearance and form of use is the same as the old annual fee card, requested at the bank branch.
The virtual card, in turn, is a resource for making purchases over the internet more safely. It has a different number from the physical card, as well as expiration date and security code. Because it exists virtually only, it is generated immediately by the application, and can be deleted at any time.
Nubank offers virtual credit card feature for safer online shopping Photo: Barbara Mannara / dnetc
Internet account opening
The speed and lack of bureaucracy to open an account on a digital platform is the great differential of this service. Promising a free life in the bank queues, Nubank, Agibank, Pag and Credicard Zero bring applications for Android and iPhone (iOS), where the customer does all financial operations.
In summary, the apps ask the user to provide personal data such as CPF, RG, address and telephone, in addition to providing information on income and profession. The systems also request the sending of a selfie and the digitization of the documents, which are registered for analysis. The credit card is issued if the user passes this assessment, which considers whether the person is negative and other financial data.
Nubank and Credicard Zero allow users to perform their initial registration via the web. However, all of them require the installation of the application on the cell phone, where it is possible to monitor expenses, check and pay the invoice, make transfers and control transactions in general.
Application from Agibank and other digital banks concentrate all the functions of the account Photo: Raquel Freire / dnetc
Flags and rewards programs
At least so far, all digital cards in the Brazilian market are under the Mastercard banner. Agibank, Nubank and Pag started operations with the international modality, while Credicard Zero started to issue cards for use abroad later.
The banner has the Mastercard Surpreenda loyalty program. The system gives points on purchases made with the credit card, which can be exchanged for benefits such as cosmetics, restaurants, trips and shows. However, participation is not automatic; I need to register on the program website to start accumulating points.
In addition, each operator can offer its own reward system. Nubank has Rewards, which offers the possibility of reducing part of the invoice or frequent expenses, such as Uber or Netflix, with the score. He hired part and has a monthly or annual cost, depending on the customer's choice.
Nubank Rewards is a carrier-specific loyalty program Photo: Divulgao / Nubank
Credicard Zero does not have exactly a loyalty program, but partnerships with several companies to grant discounts to its customers. Among the affiliated companies are Uber, Credicard Hall, Decolar, Netshoes, Zattini, Extra, Magazine Luiza, Pontofrio and FastShop.
Institutions behind digital cards
The largest bank behind a digital card is Ita Unibanco, responsible for Credicard Zero. The other three services treated here are Brazilian. Agibank is the new trade name of Agiplan, a bank founded in Rio Grande do Sul. Pag belongs to Grupo Avista, a financial institution based in Barueri, So Paulo. Nubank was born as a startup, already with that name, in So Paulo.
Neon Payments and the problems with the Central Bank
The irregularities and indications of financial crimes presented by Banco Neon, a partner of the operator of digital accounts Neon Payments, aroused the suspicion of many users for the fintechs. This is because the Central Bank decreed extrajudicial liquidation of the bank, causing several functions of the digital account to be blocked.
The BC's intervention was not primarily aimed at Neon Payments, but Banco Neon S.A., headquartered in Belo Horizonte. However, technology companies need to operate in conjunction with a financial institution to operate in the banking system. With the partner bank suspended, most of the digital account's resources were blocked.
The company, which claims to have more than 600,000 users, has already found a new partner to return to activities at Banco Votorantim. As a result, services such as registration, withdrawals from 24-hour banks, transfers and purchases in the debit function are back in service. Other operations, such as credit card, bank deposit and payments, remain disabled.