As Brazil witnesses phenomenal advancement in digital payments, EP’s CTO travelled there to see how the locals are responding and found himself caught in the middle of a heated debate over meat.
You haven’t been to Brazil in two years, why is it an exciting time for payments there?
The market has opened up so much and it’s very good news for consumers. It’s really come down to greater user and smartphone penetration. Digital payments are increasing at a very rapid rate. Brazil has just started its digital revolution and the growth potential is there.
How has the payments landscape evolved since your last visit?
I noticed six major developments:
1. Since January, 2017 Elo and Amex cards previously only accepted at Cielo (Brazil’s largest credit and debit card operator) are now open to be processed through everyone else. It’s a huge step forward for Omni-channel user experience.
2. Hipercard, which was only accepted by Rede now is accepted everywhere else – another huge 2017 improvement.
3. Pilots have started with Apple Pay and Samsung Pay in a small number of stores.
4. People have started using mobile wallets like Original Bank’s PicPay at supermarkets like Pao de Acucar. Hopefully usage will be as big as China and India.
5. Recurring transactions can now be done using debit cards without needing a PIN.
6. Mobile apps have the ability to pay with Visa Checkout, Masterpass and Paypal.
All of these are giant steps forward – the first two changes alone have opened up 20% of all cards to be accepted everywhere.
It’s still early days for mobile wallets in Brazil, what’s the market potential here?
I was waiting to get on a domestic flight actually at São Paulo airport. There were about 20 people in front of me. I had my boarding pass printed in my hand because I didn’t have access to the GOL Airlines app to download my mobile boarding pass. I noticed I was the only person using paper. Everyone else had their smartphones out to scan their boarding pass. Now if that’s not an indication of an imminent explosion of the usage of mobile wallets, I don’t know what is. All they need now is a QR code based wallet app like Alipay or Paytm – it could do wonders for Brazil and really alleviates the safety concerns around cash and ATMs.
Why should merchants consider expanding their business into Brazil?
I interacted with a lot of our banking and payments partners during my visit and my major observation was that their lifestyle is a lot like the U.S. Facebook, Uber, Netflix, Yelp, Walmart, they all do really well in Brazil. There is no reason for U.S. companies not to do really well. Markets like India and China can be more challenging because they have national equivalents. However, Brazil does not, other than Amazon, which does not have a ubiquitous presence because of local players.
And finally, Brazil is a foodie’s paradise! Tell us about what you ate there…
The highlight has to be the rodizio churrascaria- traditional steakhouse restaurants, where servers come to the table with knives and a skewer, on which are speared various kinds of meat. I had this in three cities and every city had its own take and it can get quite competitive! I found myself trying to mediate an age-old debate between two friends – one Brazilian, one Argentinian – not about who had a better soccer team BUT who has the better taste and quality for steak! Another highlight was my Feijoada experience – a traditional black bean stew – that put me into a very worthwhile food coma. Also, the seafood in the southernmost part of Brazil. Freshly shucked oysters served in 10 different ways from seafood shacks. Finally, the influences from abroad. I was very impressed with the sushi and then I found out Brazil has the biggest population of Japanese outside of Japan. Also, the Lebanese food – Brazil has the largest population of Lebanese outside of Lebanon – it was my late-night salvation.