Brazil’s government has announced that it will delay the opening of the meal voucher market by one year, which could be a setback for new entrants hoping to capture a larger share of the market. This move comes as a blow to companies that were looking to benefit from a law passed in September 2022, allowing workers to move their meal credit between providers and spend it at any participating restaurant. The “portable” and “interoperable” system was originally 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 current voucher market is worth 150 billion reais ($30 billion) and is dominated by Sodexo (EPA:EXHO), Edenred (EPA:EDEN) subsidiary Ticket, and privately held rivals Alelo and VR. 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.
However, 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 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.
