Descubre el futuro de las finanzas en América Latina y el Caribe

The future of finance in LatAm & the Caribbean

O futuro das finanças na América Latina e no Caribe



BBVA’s secret weapon for LatAm market growth

Sep 26, 2022

By Antony Pinedo
BBVA sees its Openpay gateway opening up new markets for the Spanish banking group while alliances with store chains and fintechs spur adoption of its payment solutions...



BBVA is looking to expand its Openpay payment platform in Latin America and provide itself with a springboard for entering countries where the bank does not yet have a presence.

Since its acquisition by the Spanish banking group in 2017, Openpay has followed a strategy of expanding in the region through alliances with retail chains to process electronic payments at their stores. Although the platform initially followed in BBVA’s footsteps, expanding its operations from Mexico to Colombia, Peru and Argentina, the bank now wants to use it to branch into new markets.

“We believe that payment services can be a spearhead to open new countries for the BBVA Group,” Alejandro Pineda, CEO of Openpay, tells iupana from Mexico City.

“In the future, we may see Openpay in countries — particularly in Latin America — where BBVA is not present and that we will be the first step that BBVA makes into these countries,” says the executive, who has served in a range payment and credit positions during his 40 years at BBVA Mexico.

The bank’s decision to play a bigger role in regional payments is in line with Openpay’s original expansion ambitions at the time of its founding eight years ago: the platform wanted to address the lack of payment solutions for SMEs entering the world of e-commerce.

“There was no solution for the new retailer, the startup that required a means of payment, a means of collection in order to sell its services,” says the CEO.

Still, it is a market that other banks and fintechs have been attacking from all sides, with products from mobile points of sale (POS) to payment buttons. Spain’s Santander is promoting Getnet, which handles more than 30% of e-commerce sales in Brazil; and in Peru, Intercorp says it leads in physical purchases with Izipay, which it acquired control of this year.

Openpay integrates payment methods for both physical and online stores; POS terminals, payments with QR codes and collection links are the most popular.

According to Pineda, the company processes almost 25% of all e-commerce in Mexico, where it competes with the likes of PayU, Ebanx and Getnet. Its strategy for the Mexican market is based on contracts to handle payments for the stores of large pharmacy chains, supermarkets and international online marketplaces. In addition, it has a cash-in network for receiving cash called Paynet, where users can pay for their purchases online with a code.

The company plans to expand the Paynet network through alliances, since a third of the sales they process through its digital gateway are made in cash, he says. Openpay declined to name the companies to which it provides services.

“We are growing this network of cash-in points via two strategies. First, organically: We accompany the growth of our partners every time they open a new store, a new branch. Paynet is there. And second, inorganically: joining with more commercial chains as allies, as members of the Paynet network,” says Pineda.

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Strategy in South America

The strategy used by the company in the south of the continent began with online solutions, but quickly escalated to mobile POS terminals.

“We are starting with in-store issues. But starting at the base of the pyramid with mobile POS,” says Pineda, who also leads Openpay’s expansion strategy.

The company began operating in Argentina six months ago — its most recent LatAm destination — and currently has 4,000 clients using mPOS. Pineda anticipates that they will soon launch this product in Colombia.

POS terminals have become the means by which operators offer more products to merchants in the region, such as loans or business management tools, harvesting the data they collect from transactions.

The information about sales volume that a POS can generate is valuable data. Openpay is taking advantage of this medium to explore solutions such as the technological integration of buy now, pay later (BNPL) products, the payment-by-installment method that is attracting banks and fintechs. “We’ll do things such as BNPL, and value added in general, by acquiring companies or forming alliances with companies so as not to lose our focus,” says Pineda. The firm has an agreement with a Mexican BNPL unicorn, for example.

“The commercial relationship that we already have with clients, plus the information we have about them, makes us very fluid in alliances that allow us to provide working capital credit for merchants. Credit for your customers, as in the case of BNPL. We are even thinking about opening bank accounts or prepaid accounts in some places so that people start to move from cash to payment digitally,” he adds.

In Colombia and Peru, Openpay has not introduced the Paynet network and instead has based its cash payment operation on existing channels, such as branches. Paying for e-commerce purchases at physical payment points is less common in these markets than in Mexico.

“In Colombia and Peru, interbank transfers from one account to another is king,” he says.

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Regulation in LatAm for payments

Pineda sees the region’s heterogeneous regulation in digital payments as a disincentive for global companies looking at LatAm as their next destination. However, the knowledge that Openpay has about  each market where it operates — and where it plans to expand — gives it additional competitive advantage.

He declined to say where the company may be expanding to next.

“Sixty percent of what we do at Openpay is the same for all regions. But there is 40% of our offer that has to be tailored, country by country, due to regulatory and normative issues,” he says.

Pineda says that initially he thought Openpay’s solutions were plug and play for the entire region and required only minor adjustments for each market. But that wasn’t the case, and adapting to local markets requires a significant effort. The leading players in each country also influence how new operators enter a new market.

“The processors in each geography ask you to certify different topics. There is no white book that works for everyone”, concludes Pineda.

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