20 May 2024

Aarin goes global

Banking & Finance
| The European |

The recent trade agreement between Brazil and the UK is set to power a new era of technology investment between the nations, one that techfin Aarin is excited to be a big part of 

The tech innovation arm of Latin America’s second largest bank Bradesco, Aarin, is heading to Europe using the enhanced trade partnership with the UK to propel its business.  

In December 2022 – following five months of active negotiations, and exploratory dialogues running since 2017 – the UK government announced the signing of a Double Taxation Agreement (DTA) with Brazil, reducing costly barriers to trade, investment and cross-border work. In July 2023, eight months after Brazil and the UK signed, British parliament approved the agreement, which avoids double taxation on income and prevents tax evasion and avoidance in both countries. 

This represented not only a new era of bilateral trade, but the recognition of Brazil as a huge player on the tech scene. The agreement has inspired companies such as Aarin to focus on the UK for scale-up expansions, as the cost effectiveness of utilising Brazilian tech solutions is extremely competitive on a global scale.

“The currency variation [between the UK and Brazil] alone means we are able to provide instant payment processing for 20% less than Worldpay, the country’s leading provider. It is not about re-inventing the wheel, it’s about using a scenery that was once very niche and creating new opportunities for profit,” says Ticiana Amorim, Founder and CEO of Aarin.

In addition to being a response to requests from the business community in both countries, the Double Taxation Agreement is in line with President Lula and Prime Minister Rishi Sunak’s ambitions to create new trade and investment opportunities between the two countries. Once the agreement comes into force, taxes on income and corporate profits will no longer be applied twice, ending an expensive burden and a cause for uncertainty. Measures to curb tax evasion will benefit from improved information exchange.

Other benefits presented by the UK include greater access to financial services and higher education, government procurement (opening in public tenders), and access to the entire area of medicines and protection of patents. 

For UK-based fintechs, this represents the opportunity to enlarge their product portfolio for much less and with a quicker time-to-market. The use of international patterns of interoperability such as ISO 20022 and BIAN make the partnerships between companies from Brazil and the UK simple and profitable. 

“We were born agnostic, to bureaus, to platforms, to banks and even to currencies. Aarin has its own Core Bank, SmartCore, which is free from traditional banking legacies, born for the era of Open Finance. For that reason, we are able to partner with any fintech, providing true tech, regulation consultancy, and seamless service to our customers, using Embedded Finance principles to create custom buyers’ journeys,” Ticiana adds.

Increasing trade flows 

According to Brazil’s Central Bank, Brazilian investments in the UK totalled US$8.03bn, while British investments in Brazil totalled US$28.9bn in 2022. In turn, the trade flow (the sum of exports and imports) reached US$6.5bn last year, an increase of 4.9 % compared to 2021, according to Brazil’s Ministry of Development, Industry, Commerce and Services.

The potential to exponentially increase these numbers is also centred around recent BRICS developments, such as the BRICS token, and the CBDC (central bank digital currency) initiatives in all the countries from the economic group, such as: the digital pound (UK); DREX (Brazil); e-CNV (China); digital rouble (Russia); e-rupee (India); and digital rand (South Africa – WIP). 

The financial market as a whole is still going through its decade of reshaping. The next few
years are predicted to be the era of CBDS and tokenisation of assets, which with the pioneering
of BRICS countries, can bring the economic group to new heights. 

The similarities between the digital pound (UK’s CBDC) and DREX (Brazil’s CBDC) are no coincidence, and interoperability has been a key priority in developing both solutions. 

The paths between Brazil and the UK have been laid down clearly, but true partnership will come only through the interest of the private sector of amplifying automation and optimisation. 

Aarin was founded in 2020 by Ticiana Amorim and Victor Tavares, and is responsible for over six million instant transactions per month, with a predicted growth of 400% until the end of the year. The startup’s greatest strength is not focusing only on shelf APls, which they created, but on custom solutions, catered to each client. Since 2022 they have been part of Bradesco Economic Group and have partnered with other banks, such as Next, to create the next generation of financial services.

Further information

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