Brazil is a carnival of Latin American payments innovation
Brazil gave us the samba and sizzle of Rio de Janeiro, but it also serves as a hotbed of Latin American payments innovation, with a mobile-digital mindset that all countries can emulate.
As an example of a connected economy, Brazil shines — pioneering national payment rails that are faster than the United States and advancing mobile connectivity in a way that might be the envy of the European Union.
Discussing the digital payments landscape in Latin America from a Brazilian perspective, João Del Valle, CEO and Co-Founder of EBANX, and Paula Bellizia, President of Global Payments at EBANX, told PYMNTS that the company and its peers accept payments wherever they can go in 2022. .
“Latin America is extremely connected,” Bellizia said. “We have a young population. We are seeing mobile adoption.
“When you think about the growth and explosion of alternative payment methods in Latin America, you also see things like PIX, for example, in Brazil, which is adopted by 50% of the population. not just a trend, but also something concrete that is happening in the market.
PIX is the national instant payment solution implemented by the Central Bank of Brazil in 2020.
The Global Digital Shopping Index 2022, a PYMNTS and Cybersource collaboration analyzing the behaviors of more than 13,000 consumers and 3,100 merchants in Australia, Brazil, the United Arab Emirates, the United Kingdom, the United States and Mexico, finds Brazil leads in some respects, providing a model for the region.
Some of the most interesting data points include the fact that Brazilian consumers are almost twice as likely to shop with merchants offering their preferred payment method. In 2021, an additional 52% of Brazilian merchants offered digital profiles, and 76% said they enabled voice payment.
Del Valle said: “It all ends up being good for merchants and consumers because it connects more people. It is our company’s mission to connect Latin Americans to global commerce. It’s happening all over Latam. [There’s] a very important role played by FinTechs to provide better services and connectivity to consumers and merchants.
“While it sounds simple and seamless for the consumer, there is a very complicated backend of integrations and players in these systems that need to innovate and adapt to serve this new omnichannel and omniconsumer world. “
Get the study: Global Digital Purchasing Index 2022
Mobilizing money for a continent
With a population north of 425 million and smartphone penetration of around 70%, Latin America serves as an incubator for digital convenience and connectivity. It was born out of a necessity greatly accelerated by the pandemic and is changing the region in surprising ways.
Mobile is key for Brazil and Latin America more broadly, as companies like EBANX solve cross-border payments issues and assess new opportunities in the region and beyond.
The second edition of the Global Digital Shopping Index found that in-store mobile phone usage increased by nearly 10 percentage points in 2021, where 23% searched for coupons and discounts.
Payment choice is another area where mobile is increasingly coming into play in Latin America. As the PYMNTS study revealed, consumers in the region are 63% more likely to shop with a merchant offering their preferred payment method.
“We do [research] each year called Beyond Borders,” Del Valle said. “Part of it is related to PIX. A simple data point is that everyone who used PIX in the last transaction, thinks it’s 30% or 38%, is going to choose PIX the next time they purchase from that merchant.
“There is a connection here that goes beyond analytics. It’s a sentimental bond that you [form] with this payment method because you found it convenient.
Choice and convenience are strong markers of connected economy payments that handle everything from big-dollar cross-border transactions to tiny, in-app micropayments. Wherever you focus, reliable interconnection is at the heart.
“If you look at streaming and gaming and the experiences that come with online gaming, [connected consumers] require the same experience across all channels and devices,” Bellizia said. “It’s something that we’ve watched very closely, in terms of our contributions to that experience of being part of a gaming and streaming ecosystem. And mobile plays a huge role if you think about the demographics of the game. ‘Latin America. “
She added, “Where we come from in the tech industry, everything is going to be connected. Thus, payments must provide a great experience across the entire consumer journey, i.e. play, travel, consume, buy, buy – everything.
Using the EBANX Spotify client as an example, Del Valle said, “Spotify [has] producers who put content on the platform, podcasters or musicians, artists – they all need to be paid. There is a whole fund management aspect behind that. They just released a feature in the US that’s super cool: if you have a podcast, you can start charging for the podcast. »
This speaks volumes about the power of payments to transform commerce through connectivity.
“Spotify was a company that was a very simple business model, just subscriptions,” he said. “Now it gets more elaborate. And of course the whole infrastructure has to support that because it’s a transaction — it’s a remittance, it’s a remittance — but it’s also cross-border fund management. The infrastructure really has to be ready.
See also: 34% of consumers use their smartphone to make purchases in physical stores
Cross-border first, metaverse second
In 2022, it’s hard to have a discussion about payments technology without mentioning the metaverse. Like others, EBANX is thinking and planning – but again, they think we already visit at least the metaverse in our daily digital interactions, so payments are not a leap of the imagination.
“I think we’re just letting a moment [where] maybe we were already in the metaverse. Why? Working online and across screens,” Bellizia said. “The metaverse is part of our lives in a way.”
Del Valle added, “The gaming industry has been around for a while, creating virtual things, selling virtual things and items and so on and with an infrastructure for that. Now there is a new layer for that, maybe part of it, with crypto and blockchain. It’s super interesting, with payments again playing a very important infrastructure role, even inside private metaverses.
Before EBANX likely makes any major announcements on the metaverse, it will continue to reduce friction that slows money movement while enabling greater engagement.
“Cross-border payments are really at the very beginning of their expansion,” Del Valle said. “Companies are globalizing. People are going global, so we can expect more businesses to sell goods and services across borders, and that requires infrastructure.
“[We are] really the beginning of this era. The rapid expansion of cross-border payments is certainly a trend that will continue in 2022.”
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