13 minute read

Payments

HOW PAYSAFE IS FINDING NEW WAYS TO FACILITATE LATIN AMERICA’S CASH DOMINANCE

SBC LEADERS DISCUSSES PAYSAFE’S NEW VENTURES into Latin American countries such as Argentina, how the payment firm is looking to bring new and innovative cash-based payment methods to the market and why the region is still dependent on cash

BY CALLUM WILLIAMS

Living in an age of digital payment evolution can often blind people to the importance of cash, particularly when it pertains to different markets and their dependance on it.

Despite open banking becoming a revolutionary tool for embedded finance, and mobile app payment methods being the preeminent payment option for the new generation, cash has maintained its position as a fundamental option for people that has been tried and tested throughout decades.

Nowhere is this more true than in Latin America. According to Paysafe’s CEO of eCash for Latin America, Gustavo Ruiz Mayo, “cash continues to be king” in the South American region.

SBC: Firstly Gustavo, Paysafe has recently launched its services in Argentina. What intrigued the group about the Argentinian market and what potential do you see in it?

GRM: If you look at the multiple market scene, Argentina is one of the more important markets. It’s interesting to see that Argentina has evolving technology, you have a lot of the larger e-commerce companies coming out of there.

So it's a big opportunity to serve and extend our services to those companies as well as the local players in the market, I feel we have a very strong value to alleviate some of the needs for consumers down there as well as all the transactional capabilities.”

SBC: Do you have any insight into what are the most popular digital payment methods and is cash still highly prevalent in LatAm?

GRM: Cash continues to be king in most

markets. You see all these networks across multiple markets where they have enabled cash with real-time confirmation. You’ve got all these retail places taking cash and now they have enabled that confirmation and we’re connected to those networks, owning that relationship.

This gives companies an advantage, if an international merchant wants to go into the region with one single connection we are enabling access to all those payment points, we can collect in local currency and convert that payment into the currency of origin - it’s something that gives us a competitive advantage over other players.

Depending on the maturity of the market, and how the financial industry is pushing the service, you’ll see the customer adoption which starts with peer-to-peer transactions, business-toperson.

The real value for the merchants is the access to the network, but also access to a different complementary segment of the population and the ability to process to multiple channels through real-time confirmation.

Instead of the merchant going to the market establishing their identity, and then having all the backend processes to reconcile treasury processes, that’s what we aggregated, and that’s what makes our value of position so strong across the whole of Latin America.

CASH CONTINUES TO BE KING IN MOST MARKETS

SBC: How have the acquisitions of SafetyPay and PagoEfectivo helped to improve Paysafe’s presence in the South American region?

GRM: I think it was a big strategic move for the company, because between both companies we’re definitely market leaders in the payment method scene in Peru, and the combination of SafetyPay and Pago now both integrated under Paysafe gives the company the largest network in terms of reach, not only from cash collection points but reach throughout the banking system to enable bank transfer capabilities.

We cover about 85-90% of the most important banks in each of the markets. For example in Brazil, we have coverage with Banco de Brazil, Cash Enomica, etc., same with Mexico and Chile, similar with open banking in the UK.

We enable those services with direct connections to banks, we are really building that connectivity or ACH capabilities across the multiple markets which makes it a very strong offer.

If you add to that, not only bank branches that we cover, this gives a much stronger foothold for the services we provide: Paysafecard, NETELLER, Skrill, Paysafecash, this gives access to a significant portion of the population.

What we’re pursuing is the bank customers that want to pay with other alternative products and/or bank customers who want to pay with cash.”

WHEN YOU LOOK AT LATAM FROM ABROAD, YOU MAY LOOK AT IT AS A REGION, BUT THERE IS NO COOKIE-CUTTER APPROACH

SBC: What are some of the eyecatching differences Paysafe found when first entering into the LatAm region when it comes to payment technology and development as opposed to Europe and the US?

GRM: When you look at LatAm from abroad, you may look at it as a region, but there is no cookie-cutter approach. Every market is different, every tax reg is different, so when you move into LatAm you have to move market to market, identify the difference, see what the customer behaviours are and then implement adequate technology to serve those end consumers.

In Brazil, it is extremely developed and concentrated and so you have four big players in the market. But there is still an opportunity from a tech perspective as a tech company to provide access to merchants and

consumers to enable those payment processing capabilities, and this is the opportunity we are bringing to merchants.

The maturity of the markets to more developed countries is still underdevelopment which is quite fragmented. This gives us the opportunity to interconnect. For example, in Europe you have SEPA instant where you can do instant transfers. In the UK you have open banking.

What you find in LatAm, the development of the infrastructure is more in the latter stages, you don’t have the interconnectivity and that impacts the ability for the customer to buy. That’s why implementing this network we’ve been able to attract this new segment and complement the services from a tech standpoint.”

SBC: How does Paysafe’s eCash solution help customers achieve a seamless and frictionless payment journey?

GRM: It's a very simple product. You go to the merchant checkout page, once they click on it you receive a bar code, go to the channel, present the bar code you pay and immediately receive credit and we confirm this to the merchant, collect the funds and send it over to the merchant. It’s a very efficient way to process payments.

There is still a lot of cash going around, it does not seem to be disappearing. It’s a good opportunity to get a bigger segment of the population.

Brazil has a population 220m-230m, bank penetration is close to 50% and only 40% of those customers have a credit card, and only 10% have an international credit card. So imagine that you want to buy from an int merchant, by enabling this cash solution, the customer can pay with basic cash and the merchant gets credit immediately, no fraud or chargeback an advantage over credit cards. This gives an advantage to the customer as they can purchase services or products that are not available in the market but can through this means.”

THERE IS STILL A LOT OF CASH GOING AROUND, IT DOES NOT SEEM TO BE DISAPPEARING

SBC: Are there services Paysafe is hoping to launch in countries such as Argentina and Bolivia in the future?

GRM: We’re improving some of the payment options from our Paysafecash functionality, which is the primary focus; going replicating the same model we have launched in other markets, replicating what has proven successful and providing access to this customer service.

I think it's an exciting opportunity and lowers the costs of operation for

THE LATAM STRATEGY IS TO CONTINUE TO INCREASE OUR SHARE OF PARTICIPATION IN EXISTING MARKETS

merchants, improves the payment process capabilities, and then strengthens our position across the region as a leader in alternative payment methods.

SBC: Are there plans for Paysafe to expand into other LatAm countries in the future?

GRM: The LatAm strategy is to continue to increase our share of participation in existing markets. Argentina is the next foothold, and once we have consolidated that, we tend to be conservative in terms of our approach to make sure we provide value to our partners and the network.

We take a very step-by-step approach so we can continue that leadership and enable much better options for our constituents, but we will definitely continue growing not only in the markets we have but potentially other markets in the future.” •

ZERO MISTAKES AND MINIMUM FRICTION AT THE HEART OF OKTO’S CONTINUED LATAM GROWTH

FOUNDER & CEO FILIPPOS

ANTONOPOULOS provided insight on what is fuelling the rapid expansion of OKTO as the firm continues to venture into new regions

BY JOE STREETER

The Latin American market is one of the fastest growing on the globe when it comes to gaming, therefore payment firms in the region are proving pivotal as the user experience takes centre stage.

With a focus on eradicating friction, OKTO has stepped up to the plate in the region, and the firm’s Founder & CEO Filippos Antonopoulos shared with SBC Leaders why the market holds such an allure for the group and how it is standing out to players and operators.

SBC: OKTO’s payment platform and technology is driving payment innovation for big brands in Europe. Now you are entering Brazil and Latin America. Can you tell us why this market is attractive for OKTO?

FA: Across LatAm, as in the rest of the world, we've seen the evolution from cash-centric societies to more and more dynamic digital payments markets. This trend accelerated during the pandemic, coupled with the state’s ongoing efforts to drive financial inclusion.

Brazil’s economy and population, paired with the rapid evolution of the payments industry, championed by the introduction of pix, make it one of the most attractive marketplaces. Similar trends with similar digital successes are being witnessed across all major Latin American economies, including but not limited to Colombia, Mexico, Peru and Chile. However, success in the intensely competitive Brazilian payments market will still require cutting-edge innovation and deep localisation.

SBC: Digital Payments are growing fast in Brazil, being an attractive market for more and more payment providers. What services are you offering and how can the OKTO offering further accelerate digital payments adoption in Brazil?

FA: Wherever we operate we do so in partnership with the local industry in order to deliver payment solutions to meet the specific needs of businesses and consumers in the omnichannel gambling, leisure, and entertainment sectors. This strategy is working extremely well across Europe and now in Brazil.

OKTO's payment platform offers choices and convenience that are important markers of connected economy payments that handle anything from cross-border transactions to real-time payments - pix-in & out, boleto, as well as the innovative eVoucher solution - OKTO.CASH. Wherever and whatever the solution we offer is, reliable interconnectedness is at the core, achieving the highest rates in payin and out along with the seamless real-time payment experience that consumers crave.

SBC: With so many players in the market, what would you say are the key differentiators for your Real-time Payments including pix & OKTO.CASH?

FA: I’ll double down on what I previously said. Zero mistakes and minimum friction at all business and consumer touchpoints. Brazilian consumers will quickly shift their payments to faster, more exciting methods or even will change the e-commerce platform that they are using. The excellent customer

BRANDS MUST SUPPORT CONSUMERS WITH THE RIGHT TOOLS, REDUCING FRICTION AND INCREASING SECURITY TO DRIVE CONVERSIONS AND LOYALTY

payment experience, the real-time nature of payment methods along with no failures in the completion of transactions are the perfect blend of our solutions.

Brands must support consumers with the right tools, reducing friction and increasing security to drive conversions and loyalty. OKTO spends significantly on actually co-operating its payment solutions, by actively handling responsible gaming, chargebacks, dropped transactions, on top of already boasting the highest success (conversion) rates in the market today.

By successfully innovating across the entire supply chain, we are able to drive down the cost of any operator, without compromising quality of service. And, of course, we make sure that all funds across all payment methods are aggregated and therefore combined into a single liquidity pool that makes deposits and withdrawals fast and easy to manage.

SBC: Can you tell us about the adoption of OKTO’s solution in Brazil? How has the payment journey been embraced in the region? How vital is the OKTO offering to ensure that consumer desires are met as the payment journey becomes increasingly digitised?

FA: The many advances that are occurring on what seems a daily basis are delivering previously unthinkable flexibility and speed across all our

solutions. We see at OKTO the opportunities and recognise the challenges, and we certainly know the most important work we do is to strive to meet our customers' and their customers' needs on a daily basis and protect their security while ensuring seamless payment experiences. The very high success rate in deposits and payouts speaks for itself about how our payment journey is embraced by the Brazilian players.

What is essential for us is to remain focused on innovation and entrepreneurship. We are not in the business of merely competing with other payment and technology companies for new capabilities. Instead, we share a goal to ensure that the fundamentals of payments remain reliable, transparent and secure, so consumers and merchants feel safe and confident in line with the rules and technology.

Our mission is to deliver a payment platform focused on security, reliability, innovation and the seamless integration of a variety of global and local payment forms and factors. In this way, we support all payment transactions in their ability to remain frictionless for consumers and in realtime, meeting the different demands of various end-users’ generations.

SBC: Lastly, could you share some insights into the deals OKTO did with operators and casinos such as Kaizen, Codere, Gausselman and the Hippodrome. Do you anticipate the same with operators in Brazil and South America, following the lead of the big European players?

WE ARE NOT IN THE BUSINESS OF MERELY COMPETING WITH OTHER PAYMENT AND TECHNOLOGY COMPANIES FOR NEW CAPABILITIES

FA: It’s a fantastic sign of confidence from brands that are not only established as leading European and global operators, but are also widelyrecognised as industry trendsetters.

UK brands of Gauselmann Group were the first adopters of our cashless solution, being the first in Europe that launched instant cashless payments directly on gaming machines to meet their customers' demands. Hippodrome was the first in the casino side introducing OKTO to its visitors via a fully-embedded solution in the Hippodrome app, being always in the front line of digitalisation.

On the online and omnichannel side, Codere undertook an extensive due diligence process when choosing OKTO and our omnichannel partnership is a testament to the effectiveness of the award-winning technology and compliance that lies behind our solution.

Kaizen was the first to have ‘phygital’ payment experiences with OKTO.CASH via our partnership, and our cooperation is based on our common belief that a digitised, seamless, and secure payment experience forms an integral part of players' overall experience.

The speed of change and the adoption of the digital methods of OKTO we are witnessing in Europe and the UK has never been greater or more exciting. It is taking place in every region and in every industry, we are involved in - and Latin America is certainly not an exception •