Brazil’s central bank has ordered the liquidation of Will Financeira, a fintech linked to the troubled Banco Master, amid an ongoing fraud inquiry. The move, reported Wednesday, highlights increasing scrutiny of Brazil’s rapidly growing financial technology sector and raises questions about the stability of institutions operating within it.Mastercard has already begun seizing assets tied to Banco Master as a result of Will Financeira’s default on payments, acquiring stakes in both the e-commerce firm WestWing and Banco de Brasília (BRB).
Brazil’s central bank has ordered the liquidation of Will Financeira, a financial firm controlled by Banco Master, marking the latest fallout from a fraud investigation involving the latter. The move underscores growing concerns about financial stability within the country’s rapidly evolving fintech sector.
The central bank’s decision followed Will Financeira’s failure to make payments to Mastercard on January 19, resulting in its removal from the payment network’s system. According to the central bank, “the deterioration of its financial situation, its insolvency, and the evident control exercised by Banco Master made the extraordinary liquidation of Will Financeira inevitable.”
In the wake of the liquidation, Mastercard executed guarantees provided by Banco Master, acquiring 31.87% of the shares in WestWing, an e-commerce company, and 6.93% of the total capital of Banco de Brasília (BRB). Mastercard has stated its intention to sell these shares.
The WestWing shares originated from WNT, an investment firm that holds investments from both Banco Master and Nelson Tanure, and which previously owned 39.4% of WestWing. Both WNT, Tanure, and Daniel Vorcaro were subject to search and seizure warrants during the second phase of the Federal Police’s Operation Compliance Zero last week.
WestWing stated to Brazil Journal that its administration “was not involved in the operation that triggered the change in the shareholder base and remains focused on executing the business’s growth and profitability strategy.”
BRB does not publicly disclose Banco Master’s – or its former – ownership stake in the bank. Companies are required to disclose any ownership exceeding 5%. BRB did not respond to a request for comment from Brazil Journal as of press time.
Mastercard, in a statement, explained that as a regulated payment arrangement, it maintains various types of guarantees from its participants, including assets like shares. “These guarantees are exclusively intended to ensure the fulfillment of payment obligations by issuers in the event of default,” the company said.
The liquidation of Will marks a disappointing end for a fintech startup that once showed considerable promise, particularly in serving underbanked customers in the Northeast region of Brazil.
Will previously attracted significant investment, including a R$250 million round from XP and Atmos, and partnered with high-profile influencers like Pabllo Vittar, Whindersson Nunes, and Maísa as brand ambassadors (more recently featuring soccer star Vini Jr.).
Atmos exited the investment in 2023, followed by XP’s private equity arm in 2024.
In August 2023, following changes to minimum capital requirements for payment institutions, Will was deemed non-compliant by the central bank and was instructed to find a solution.
A potential solution was identified in February 2024.
The digital bank sold 100% of Will Pagamentos to Reag, owned by João Carlos Mansur, who has been implicated in the Quasar and Compliance Zero investigations. Banco Master retained 75% of what it termed the “Grupo Will Holding,” encompassing Will Financeira, Will Holding, Will Produtos, and the FIDC Azo, which holds rights to a R$30 billion legal claim filed by the bankrupt CIB construction company against the DNER.
