Brazilian payment platform focus on African market to expand digital payment business

11/08/2022

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Paula Bellizia — Foto: Silvia Zamboni/Valor

Some time ago, emerging and developed economies were expected to go through the same phases in terms of payments. Today, it is clear the path is different and innovations are coming from emerging markets, said Paula Bellizia, Ebanx’s president of global payments. The Brazilian payment platform operates in 15 Latin American countries and has just arrived in Africa.

To grow in these regions, it is necessary to put alternative payment methods and local consumer preferences at the center of the discussions, she told Valor during the event Money 20/20, in Las Vegas. “To be successful in Latin America or Africa, you cannot consider only cards. In Brazil, only 40% of people have a credit card. In Nigeria, it’s 10%.”

Ms. Bellizia notes that, according to data from Americas Market Intelligence (AMI), the share of alternative payment methods in digital commerce in Latin America has grown to more than 38% now from 31% in 2020. “And it just keeps growing. The future will be instantaneous and alternative,” she said, highlighting the rapid expansion of Pix transactions in Brazil since the Central Bank launched the instant-payment system, in late 2020, as an example.

Ms. Bellizia also believes that business development in emerging countries required that companies understand users’ local preferences. “Consumer behavior in emerging markets is different, not just a matter of industry maturity. And innovation is coming from our markets.”

In her view, it is a mistake to think, for instance, that it is only a matter of time before credit card penetration in the region reaches the same level of developed countries. “It won’t be like that. The consumer habit here is going to be different.” Cards are likely to continue to grow but in parallel to the new means of payment, she said.

The executive added that the problems to be solved are different and drive the development of specific solutions. “We are still promoting bank use for part of the population. And Pix was a great financial inclusion move.” These particularities represent great business opportunities for emerging countries, she said.

Founded in Brazil in 2012, Ebanx announced in September the expansion of its operations to Africa. According to Ms. Bellizia, the choice was due to its similarities with Latin America. The challenges faced by African countries today in terms of payment are similar to those experienced by Latin America in the last decade, she said.

In addition, she points out that there are great opportunities in Africa in digital verticals such as Software as a Service (SaaS), streaming, and gaming. “The base is still being built, but Africa is growing faster than North America in gaming today. If a company misses this timing to enter Africa, it will quickly be left with a weak presence.”

Initially, the payment platform will operate in Kenya, Nigeria, and South Africa. According to the executive, the three countries were chosen because they account for more than 30% of the continent’s economy and have a strong use of smartphones. The idea is, in due time, to expand to other neighbors.

Ebanx works with global brands that want to expand their operations to Latin America, including Shein, AliExpress, and Uber. In June, the payment platform announced that it would review its operation, reinforcing the focus on international payments, which are its core business. According to the fintech, the change will discontinue projects and reduce by about 20% the group’s workforce of more than 1,700 employees.

According to the executive, Ebanx reviewed its priorities and shut down the local payment operation to focus on the core business. “We remain super focused on global expansion,” she said. “There are strong competitors in the market, but the company has a strong reputation and stands out because of the depth of partnerships, knowledge of local markets, and superior performance.”

Ebanx even filed a secret request for an IPO in the United States last year, but the plan was postponed amid the decline of technological companies. The executive did not want to comment on the subject and said that “at the right time” the company will talk about it.

As for the macroeconomic environment, she said that, although the scenario of inflation and high interest rates required attention, it also represents an opportunity for Latin America. “We also have our difficulties, but in a way, the scenario in the region, compared to the global one, brings opportunities.”

The reporter’s travel costs were covered by Nuvei.

*By Mariana Ribeiro — Las Vegas

Source: Valor International

https://valorinternational.globo.com/