PAYTECH FOCUS: SOUTH AMERICA Fancy footwork: Brazil's payments innovations are as dazzling as its culture
Riotous colour, vibrant music, sensuous dance and a unique, restless energy, Brazil’s get-up-and-go is filtering through into how it does payments, says PagBrasil’s Ralf Germer Brazil has taught the world a thing or two about joie de vivre – from its famous carnivals to fluent and flowing football. And, when it comes to moving money with speed and versatility, it’s demonstrating the same flair and flexibility in payments. Thanks to the growth of fintech companies and government-led initiatives, plus a favourable regulatory environment, digital payments have taken off in Brazil, boosting financial inclusion across a population of more than 200 million and achieving a level of ease in business-to-business (B2B) transactions, in particular that the rest of the world would dearly love to emulate. Such positive trends were well-established before COVID-19 hit, but the pandemic sent digitisation into overdrive, and, as a result, the vast majority of Brazilians now have access to cutting-edge financial services. PagBrasil, a fintech that focusses on payments, has been a key player in this transformation. It has helped to create a strong online payment infrastructure for the Brazilian market through a range of products that support both multinational
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e-commerce businesses and the everyday needs of consumers. One of the main catalysts has been the introduction of Brazil’s unique Pix payment system, and, as it approaches two years since launch, PagBrasil’s CEO and co-founder, Ralf Germer, reflects on its impact so far, as well as other developments. Although German by birth, Germer is well-placed to describe both the Brazilian national character and the country’s commitment to e-commerce and digital payments. He grew up in Sao Paulo and has wide international experience. Around 10 years ago, he spotted a weakness in Brazil’s payment infrastructure that was also an opportunity. “I saw a payments obstacle that we needed to overcome,” says Germer, “because Brazilians wanted to pay with domestic methods that don’t exist outside of Brazil – even credit cards such as Visa and Mastercard were not enabled for payments with foreign card acquirers.”
PETRI DISH OF CHANGE Over the decade since, Brazil’s payment rails have come a long way, and Germer says it is now a payments leader in
Latin America, with a thriving e-commerce industry and a growing number of options when it comes to transacting. And the country’s unique characteristics have contributed to the speed of its progress, compared to elsewhere. “Demographics and culture have contributed to this change,” he says. “A large part of the population has enough income to consume high volumes. We’re talking about at least 40-to-50 million inhabitants with purchasing power that’s equivalent to Western Europe. Brazil is also a very dynamic country, with a young population that is receptive to new technologies and e-commerce products and services.” Naturally, e-commerce cannot succeed without efficient online payments, which is why fintech innovation and government sponsorship have been vital in paving the way for Brazil’s digital economy. Germer says that the long-term plan is for invisible payments, where everything happens seamlessly in the background, but e-commerce transactions have some way to go before this is achieved. “However, change is on the way,” he adds. “Fintechs like PagBrasil are optimising the payment process, improving consumer ffnews.com
