As of April 2023, there were 1,000 active fintechs in Latin America (LatAm) with a vast majority focusing on financial inclusion, tackling the issue of 70 per cent of the population not having access to formal financial services. Em Conversa looks to uncover what the future of fintech could look like in the region, following a $2.1billion valuation in 2022.
In March 2024, emerchantpay, the global payment service and acquirer, solidified its position in the LatAm market by partnering with fintech, FitBank. Exploring how this partnership fits into the company’s grander LatAm vision, we sat down with André Boesing, vice president of international business development and head of Latin America at emerchantpay.
Can you tell me more about the company and your role within it?
André Boesing, vice president of international business development and head of Latin America at emerchantpay
In 2002, emerchantpay was founded out of a need to better support merchants who were finding it difficult to navigate the quickly evolving payment landscape.
Today, the business has evolved into a leading global payment service provider and acquirer for online, mobile, in-store and over the phone payments. emerchantpay empowers businesses of all sizes and in various industries – including e-commerce, retail, travel and hospitality – to optimise their payments. We have a presence in 19 different countries, including Brazil and Mexico.
As vice president of international business development and head of LatAm at emerchantpay, I’ve used my skill set and experience to help the company grow into a major cross-border payments player. Since stepping into the role in 2018, I’ve led huge global deals, helped the business to expand its operations in new markets and built strategic relationships with key stakeholders.
International business development is a dynamic and ever-changing area that certainly comes with its challenges.
My role requires me to confidently navigate market shifts (such as regulatory changes) and be a resilient, strong negotiator. I also need to be adaptable and flexible – willing to travel and develop an understanding of different cultures and languages. I’ve found contributing to emerchantpay’s growth and being part of a dedicated, diverse team to be a truly rewarding experience. I’m excited to see what new opportunities arise as the LatAm market continues to evolve.
What are some payment trends we’re seeing in Brazil?
In Brazil specifically, the opportunity for merchants is vast. Brazil has the fastest-evolving e-commerce market in LatAm – predicted to surpass $60billion by 2025. To accomplish business success in this market, global merchants need to understand the ins and outs of the local e-commerce landscape and customers’ purchasing habits.
In terms of payment preferences across the country, Pix, the Brazilian Central Bank’s instant payment platform, has taken an impressive market share. In fact, 36 billion transactions were processed by Pix in Brazil in 2023. Another alternative payment method that is gaining popularity in the region is e-wallets. They are a quick and convenient way to pay for goods and services and it’s estimated that around three-quarters of Brazilians will utilise e-wallets by 2025.
Our recent Global Payments Outlook report also dives a little deeper into last year’s most popular e-commerce categories across LatAm. In Brazil, clothing, shoes, and drugstore and health benefits were the top three categories for online purchases in 2023. As such, enhancing payment processes could help merchants in these sectors meet high consumer demand and better manage rising traffic.
What is emerchantpay doing to improve the payments sector in Brazil and LatAm?
In January this year, we expanded emerchantpay’s payment capabilities in LatAm. This enabled international businesses to accept popular local payment methods and domestic and international card schemes in eight countries within the region.
By leveraging the solution, cross-border merchants and partners can expand into Argentina, Brazil, Chile, Colombia, Mexico, Paraguay, Peru and Uruguay and operate there locally – without having a local presence. This significantly minimises admin costs and offers further value-adding capabilities for customers and partners looking to tap into the region.
In March this year, we also announced our partnership with Brazil-based fintech company, FitBank. This collaboration has enabled us to strengthen our cross-border payments offering to customers and partners targeting the sought-after Brazil e-commerce market. For instance, it has allowed us to provide our global merchants with additional infrastructure to accept Pix and Boleto payments – two of the most popular digital payment methods among consumers in Brazil.
We are also committed to providing our customers and partners with educational resources to support their decision-making. In addition to our Global Payments Outlook report, we recently published regional payments guides and infographics delving into consumer preferences for online shopping and payment methods across LatAm. These resources help to educate and inform merchants so they can provide an optimal payment experience to their customers with offering solutions that meet consumer demand.
How does the Brazilian payments sector compare to that of the rest of the world?
Contrasting to Brazil’s payment sector – which favours real-time account-to-account solutions – our research shows that cards still reign supreme as Europe’s most popular payment method. On the other hand, in Asia, users have transitioned to almost completely using digital wallets for payments. In the Middle East and North Africa, much of the population remains unbanked or underbanked, meaning that there is still a heavy reliance on cash.
Brazil is one of the few regions globally that has seen the adoption of account-to account payments on a huge scale. For instance, Pix has amassed over 150 million regular users since its debut in 2020, moving more than $400billion monthly. Usage of the solution is continuing to rapidly scale – expected to represent 40 per cent of online payments made in Brazil by 2026.
The introduction of Pix has significantly helped address financial inclusion in the region by enabling many unbanked Brazilians to participate in the formal economy for the first time. While some countries have similar instant payment systems, Pix’s combination of features, adoption rate, and impact on the broader financial ecosystem makes Brazil stand out as a front-runner in payments.
What are some unique challenges associated with the region/country in the payments space?
A key challenge for merchants looking to break into the LatAm market is the inconsistency of digital infrastructure and internet accessibility across the region. These discrepancies can impact the efficiency of payment processing systems.
As a result, merchants need to make different considerations and partner with payment providers that offer tailored solutions for each country to ensure effective cross-border transactions. However, integrating several payment systems into the merchant’s infrastructure can be costly and complex. This is when partnering with a payment service provider that offers deep local market expertise can prove beneficial.
Another challenge is that the rapid e-commerce growth in LatAm has triggered an equally swift increase in fraud. In fact, 20 per cent of all revenue in LatAm is lost to fraud – making it the region with the second highest e-commerce fraud rate globally (putting it only second to Southeast Asia). To combat this, businesses need to implement risk management strategies that help safeguard revenue through robust fraud prevention.
What are your plans for the future?
Our future plans focus on continuing our strong growth in the region. These plans include expanding payment capabilities with more robust infrastructure in additional countries.
We are committed to continuously enhancing our existing offering to provide seamless cross-border transactions for our international merchants. Furthermore, forging strategic partnerships with key fintech players in the region will also be a priority, enabling us to offer innovative and tailored payment solutions to meet the evolving needs of businesses and consumers across the region.
Any final thoughts?
We’re excited about the opportunities ahead as we continue to grow and innovate in the payments space in LatAm. Our focus remains on providing seamless, secure and locally tailored solutions that help businesses thrive in an increasingly digital and interconnected region. We look forward to driving further success for our merchants focusing on this ever-growing market.
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