Financial inclusion and digital innovation in LATAM – interview with SafetyPay


We sat down with Gustavo Ruiz Moya, CEO of SecurityPay, to learn more about financial inclusion, digital innovation and the role of alternative payment options in LATAM

LATAM has made great strides in increasing general access to financial products. Can you elaborate on initiatives in this space that have emerged or gained ground over the past two years?

Over the past 18 months, financial opportunities and options in global markets have faced dynamic changes when it comes to daily payments. LATAM consumers show high demand for digital transaction experiences, and LATAM is emerging as the fastest growing region in the world for mobile e-commerce. At the same time, the middle class has grown by more than 50% over the past decade, which, combined with a high smartphone adoption rate of more than 60%, increased demand for more fintech products and payment options.

Since September 2020, 40 million people in LATAM remain unbanked, down from 45 million in May 2019 – and according to Statista, Colombia, Peru and Uruguay obtained financial inclusion scores up to 75 (out of 100) in 2019. They ranked first among countries with the best access to financial resources, even above major Asian markets like India and the Philippines, with a score of 71 out of In addition, countries such as Mexico, Brazil, Chile, Colombia, Peru, Ecuador and Uruguay are all developing open banking frameworks.

Many parts of the world have adapted to the global shutdown by taking advantage of digital payment channels. Cash payments are declining in favor of electronic payments, but remain an essential payment method for the 200 million Latin Americans who do not have their own bank accounts.

Trade in the region is still dependent on liquidity, with 21% of e-commerce transactions paid in cash, compared to 10% in Asia and 7% in Western Europe. LATAM countries are implementing ideas (such as social commerce) that have been proven in other markets to help improve their business strategy, which begins with the implementation of digital portfolios. Countries like Mexico have built and integrated digital wallets with QR in their markets, allowing traders to further examine the data and growth rates of cross-border digital models. With a QR code-based digital payment platform, Mexico is much more advanced in instant payments than many other LATAM marketplaces. Following this trend and in order to add more alternative payment methods for consumers and merchants, SafetyPay has implemented an instant payment solution based on QR code, PIX in Brazil as an additional payment option for its traders last May.

What are the main obstacles that still stand in the way of financial inclusion and how can they be overcome in order to also support the LATAM trader community?

While financial inclusiveness around the world is on the rise in 2021 due to new policies, tech-focused financial institutions, and advancements in the fintech industry, there is still a long way to go.

Geographical distance is one of the main obstacles, as financial institutions locate banks in densely populated urban areas. The vast majority of the unbanked and underbanked population live in rural areas, and their lack of physical access to a reliable financial source leaves them financially excluded. Additionally, high transaction costs are also an issue, as many transactions come with fees that might be unaffordable for low-income customers. Latin American governments are starting to create more inclusive environments to support the growth of e-commerce. Colombian government has introduced three days without VAT in June, July and November 2020. They focused on the effectiveness of online sales and recognized the potential of e-commerce to stimulate economic growth.

For merchants and their customers, implementing new frictionless technology that addresses discrepancies in payment options can have a positive impact. For example, providing QR options for purchasing in-store products and paying bills within a single secure account makes it easier and faster for the consumer to pay for goods and services, while improving convenience for consumers. tradespeople.

In many parts of the continent, people have no or limited access to financial services. How can digital innovation and digital financial solutions support a decline in this direction?

The framework behind digital innovation and digital solutions is designed to accelerate the flow of payments, facilitate reconciliation and streamline opportunities. Digital investment and innovation around dedicated resources like interactive customer support and payment management services for middle-class and low-income customers is essential moving forward. Keeping a customer-centric mindset and raising awareness of digital innovations such as QR codes, biometric payments, and cryptocurrency transactions can provide access to financial services to millions of customers who may have missed these. opportunities in the past. In addition, Mastercard New Payments Index identified contactless technology as “the digital catalyst” for exploring new payment options. The survey also found that 66% of respondents in Latin America and the Caribbean plan to use payment technologies such as QR codes in the next year.

What are the biggest gains recorded after the last 12 months in terms of consumers’ existing financial habits?

Customers are more concerned about fraud and are actively turning to options that don’t compromise their financial information, such as accessing their banking information through secure apps and sites on their mobile devices. Through this shift in consumption, banks, businesses and startups are rushing to adapt to consumer preferences. LATAM gravitates to digital channels, products and services across different spectra. Like the rest of the world, customers are looking for digital and contactless payment methods. Latin American consumers are very open to buying physical products online, they are also interested in high-end products, and they are price-conscious shoppers. Recent data from Kantar shows that in the first quarter of 2021, compared to 2020, people in Brazil and Mexico of all socioeconomic levels were shopping less often but buying more per trip.

How has SafetyPay supported financial inclusion in this new local context?

Addressing financial inclusion is essential for future economic growth and financial security. By offering an alternative payment option to underbanked consumers or those who have chosen not to use credit cards, SafetyPay opens up purchasing options that were not previously available. For businesses, two essential elements for promoting added value must be part of their overall strategy: to provide a transfer platform for customers who want to shop online without compromising financial information and to provide instant confirmation to merchants. to better manage their stocks in real time. time. Both need to be considered and executed to build customer confidence, which will ultimately lead to future banking success.

This interview is part of the 2021 Payment Methods Report – Latest Trends in Payment Preferences, a comprehensive overview of the payment methods being considered for 2021, as well as best practices for optimizing payment and converting customers to addressing digital transformation, security and localization.

About Gustavo Ruiz Moya

Gustavo Ruiz Moya, CEO of SafetyPay, has led the company since 2013. His extensive experience spans multiple industries such as payments, banking and travel industries. Prior to joining SafetyPay, Gustavo headed American Express Bank in Mexico, holding a number of executive roles, including Vice President and General Manager. Its strategic vision and knowledge of international markets guide SafetyPay to achieve ambitious performance targets.

About SafetyPay

Founded in 2007, SecurityPay is a secure and convenient alternative payment platform that enables e-commerce transactions on behalf of consumers and merchants. With a comprehensive suite of B2C and B2B payment solutions available, the company eliminates common issues associated with traditional payment methods. SafetyPay enables cardless payments, whether in the form of bank transfers or scanning cash. The platform is currently a partner of more than 380 banks in 18 countries around the world, in Latin America, Europe and North America.


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