The pandemic has revolutionized the economy. Today, the menus in the restaurants come in QR codes, the office is in the living room of the home and the meetings are by video call. The world of payments has not been left behind: after covid they are more digital and can be made with a mobile phone, a watch or a smart bracelet. “We are witnessing technologies that allow us to pay without contact in an almost imperceptible way”, explained Cristina Ruiz, CEO of Indra, during the presentation of the XI Report on Trends in Means of Paymentprepared by Minsait Payments, a company owned by the technology and defense group.
Ruiz also highlighted that the sector is facing a profound transformation in which various innovations come together. From payments using RFID (contactless), biometrics, so-called mobile-money (electronic money that has become a valuable mechanism with great potential for social and financial inclusion in countries without infrastructure) or the conversion of mobile phones into POS terminals. “We are witnessing the birth of new forms of money such as cryptocurrencies or the new digital currencies of central banks,” said the head of the company at the event held in Madrid this week and which had the collaboration of Retina.
The payment market is getting faster and more convenient for the user. But also much more competitive. “New players are breaking in,” said Alberto Alves, head of new business at Minsait Payments. Payments are no longer an exclusive business of banks. Telecommunications companies, technology giants, distribution companies and neobanks are gaining their space. “However, the financial entity continues to be the absolute protagonist,” stressed Alves. In Europe, 9 out of 10 bank users, and in Latin America, 7 out of 10, consider these as their main entity, according to data from Minsait Payments. There are geographies, however, in which behavior is already beginning to be different.
In Brazil and Colombia, for example, there has been a significant irruption of neobanks. “25% of financial customers [en los países antes mencionados] it considers them its main entity,” highlighted the Minsait expert. Something similar happens in the Dominican Republic with telecommunications companies. “There is a possibility of turnaround,” stressed Alves. In Europe, the client still has a stable and established relationship with his financial institution. He is not so willing to trade with another market participant. He is more faithful.
“The opposite happens in Latin America.” There, the protagonists of the revolution are diverse. From Nubank, the largest digital bank in Brazil with more than 40 million customers, to Argentina’s Ualá and Mercado Pago (which belongs to the marketplace Mercado Libre), as described in the study published by Minsait Payments, which includes the opinion of 225 managers and experts, as well as the conclusions of more than 4,800 interviews with the banked population of Spain, Italy, Portugal, the United Kingdom and Latin America. In the region, Rappi also stands out, a Colombian firm that was born in the delivery business, with 60 million registered users in nine Latin American countries. “It is natural that within this success, with so much transactional volume, an offer of financial services is born,” commented Gabriel Migowski, CEO of Rappi Colombia, during the event.
The first step the company took was to create a wallet that later evolved into Rappibank, which has already distributed more than a million credit cards in five Latin American countries. “We see even more potential ahead,” added the manager. Financing, through credit cards, does not reach everyone equally. In Mexico, for example, of the 54 million people who have a financial product, only 15% of them have a credit card. “Most of it belongs to people with high incomes,” added José Luis Mateos, co-founder and director of operations at Nanopay. The firm, born during the pandemic, seeks to break that gap. “We offer our clients a simple, fast and digital financial inclusion”, said Mateos.
He knows in depth all the sides of the coin.
Cash is the leader
Despite the impact of the pandemic on changing habits and, in particular, towards the digitization of daily transactions, cash is perceived by the industry as the most common means of payment. To the question: “What do you consider to be the most common means of payment in your country (the one with the highest number of payments)?”, 44% of the experts answered that it was cash. But in second place are the cards, which in the coming years, according to the analysis, will be the most used.
“We still have in mind that [las tarjetas] they are a plastic, but it has changed”, explained Enrique Álvarez, director of business development in Europe Minsait Payments. The user is looking for an easy and fast way to use. Among them are cards, but also payment applications between individuals. “When experts are asked, in 2022, what is going to be the most used payment in 2030, the answer is: it has not been invented.” For Eduardo Prieto, general director of Visa Spain, in the last two years we have seen an evolution and revolution in digital payment methods. “We have grown exponentially. In Spain we have a long way to go for growth… we have the goal of gaining ground on cash”, he highlighted. “The market’s interest in other payment channels beyond the card is clear,” acknowledged Paloma Real, CEO of Mastercard. “So is the interest in information and data services for business processes, customer and consumer knowledge,” she explained.
Personalization is the key to the future and data is the backbone. Not only to identify the needs of each consumer, establishment or company, but also to anticipate possible changes or businesses. A real look at what is happening to reduce the uncertainty of the future. To do this, financial institutions need to collect as much information as possible. “Capture as much as you can, because data that seems irrelevant today may make sense in time, with a new algorithm,” recommended Javier Martínez, head of engineers at Google Cloud Spain. And for this information to gain value, it must be made accessible. “The more teams within the company that have access to that data, the more insights we’re going to have,” he stressed. The use of new technologies will also bring value. “We are talking about data analytics, machine learning [aprendizaje automático], neural networks”, said Miguel Ángel Prieto, director of Minsait Payments solutions. “The interesting thing is to store the information, but it is much more interesting to chew it and offer pills of knowledge.”
Borja Ochoa Gil, CEO of Indra, Global Head of Minsait Financial Services and CEO of Minsait Payments, took the opportunity to talk about the company. “In 2021 we grew 20%, which seems very reasonable to us, taking into account the context,” he mentioned. “We are living in difficult times in which progress and entrepreneurship is complex.” The manager highlighted that the consumption of APIs (application programming interface) on his platform was 5,000 million. “It is a sample of the dynamism that our services are having.”