Friday Briefing: Beyond bank commissions

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September 30, 2022

#TopStory 🔝

Payment initiation: the new age of acquiring

The payments business is being transformed and it’s forcing players in the sector to rethink traditional acquiring structures, along with their value generation and monetization models.

A case in point is Spanish fintech Belvo, which specializes in data management. This week, it received a payment initiator license (ITP) in Brazil, with which it can start using the Pix instant payment system to process payments
directly from a bank account through third-party applications.

This formula does away with traditional intermediaries — such as acquirers — and at the same time introduces a new business model for the industry.

“Account-to-account payments are going to change the mentality we had of charging a percentage of the transaction’s value,” Albert Morales, Belvo’s manager in Brazil, tells iupana. “The business models it creates are in addition to — above — payments,” he adds.

While initiating payments doesn’t generate a profit on its own, it allows Belvo to strengthen the data intelligence services it offers clients, which translates into additional income for
the fintech, says Morales.

Institutions such as Banco do Brasil, Itaú Unibanco, Bradesco and the fintech Mercado Pago comprise the list of payment initiators in Brazil, which underscores the interest of industry giants in the segment.

#OpenFinance

Brazil in numbers

The open finance model is already a reality in Brazil, with 350 million API calls per week, almost 10 million consents and 800 participating institutions, including some that are not obliged to take part. The figures were shared by Otávio Damaso, director of regulation at the Central Bank, at ABFintechs’ Fintouch event this week.

“Open finance is already happening and it is also having a concrete impact on clients. We know of use cases where information is being shared within the ecosystem. But there is still the challenge of making it clear to the client who has benefited from open finance, that it is a
result of open finance,” he added.

According to Damaso, the fact that financial institutions that were not required to participate in the system joined it voluntarily is evidence that it works and shows there is an opportunity for offering value to customers.

Looking to the future, Damaso points out that open finance will play a fundamental role in the transformation of the payment industry, specifically Pix, as well as the entire agenda for tokenization, DeFi and Brazil’s CBDC, the digital real.

#Strategic Plays 📊

Bitso enables crypto payments with QR in Argentina

Mexican exchange Bitso has introduced cryptocurrency payments using QR codes and fiduciary currency in Argentina. Users will be able to pay with crypto in physical and virtual stores that accept QR as an interoperable means of payment.

Pay with Rappi and Dapp forge alliance

Mexican mobile payment technology company Dapp and payment processor Paga con Rappi have joined forces to enable QR code payments in Mexico. It gives Rappi users access to more than 30,000 businesses in the Dapp network. The alliance aims to provide alternatives for online transactions.

Global66 launches prepaid card together with Mastercard

Chile’s cross-border payment fintech Global66 launched its Mastercard prepaid card, which allows users to make national and international transfers, exchange currencies, withdraw money and pay bills.

#Regulation ⚖️

In Colombia, the Banco de la República project to develop an Instant Payment System inspired by Pix has gotten underway and is expected to begin operating at the end of 2023.

Also in Colombia, green taxonomy makes headway within the Superfinanciera’s roadmap for the creating
sustainable lending and insurance products.

In Brazil, the Central Bank wants to give a boost to the payments ecosystem by limiting fees for debit and prepaid card transactions, which are a source of income for plastic issuers and are especially important for small fintechs that depend on a single product.

In Honduras, the Central Bank reduced the minimum capital requirement to set up a wallet by more than 90% in an effort to encourage more companies to enter the sector.

• Read all about these and other regulatory changes affecting digital finance in Latin America at iupanaPRO.

#Investments 📈

Fintech Ali raises over US$25m

Brazilian fintech Ali received an investment of more than US$25 million during a round led by BTG Pactual’s business hub, BoostLab, and an anonymous venture capital fund. The startup, which provides salary deduction loans, plans to use the proceeds to expand its product offering in 2023.

G2 Fund invests in platform for SMEs
Pagaloop

G2 Fintech Fund invested an undisclosed amount in Pagaloop, a platform focused on improving the management of payments and collections for entrepreneurs through a website, an app and a widget.

#People 👥

Pedro Romero leaves Banco PAN for PicPay

The PicPay digital wallet in Brazil has hired Pedro Romero as its new director of financial services for individuals. Romero has more than 10 years of experience in payments and digital banking, having previously worked at Banco PAN, Elo, Mastercard, PagSeguro, Agibank and Conta Azul.

Carlos Grieco named CEO of SumUp

Carlos Grieco is the new CEO of SumUp, a technology and financial services company for micro and small businesses in Brazil. He previously led the firm’s payments and marketing divisions.

#iupanaExclusive 🔥

BBVA has a plan: expand its Openpay payment solution and use it to enter other countries where the bank lacks a presence. This week, we spoke to Alejandro Pineda, CEO of Openpay in Mexico, who told us about the gateway’s expansion strategy, its alliances with retail chains, the role of cash in Latin America, and more.

• Alliances with store chains and fintechs are spurring the uptake of BBVA’s payment solutions.
• Openpay has expanded to Argentina and will enter the Colombia market soon.
• The firm
  plans to use alliances to expand its Paynet network, which receives cash for online purchases.

Learn more about this maneuver by one of the world’s largest banks in this week’s exclusive interview.