Fintech
Em Conversa: Integration of regional payments with Yuno
As of April 2023, there were 1,000 active fintechs in Latin America (LatAm), the vast majority of which were focused on financial inclusion, addressing the problem of 70% of the population lacking access to formal financial services. Em Conversa looks to find out what the future of fintech could look like in the region, following a $2.1 billion valuation in 2022.
In Brazil, nearly two-thirds of the population trust fintechs (57%), as many of them have addressed traditional problems faced by the country, such as access to finance. However, even more can be done. We met to explain how payments can be further digitized and democratized Juan Pablo Ortegaco-founder and CEO of Yuno.
Can you tell me more about the company and your role within it?
I am the co-founder and CEO of Yunoa global payments orchestrator with a mission to democratize financial transactions by helping businesses more easily navigate the complex payments landscape across geographies.
Our platform aggregates over 300 different payment methods worldwide, allowing businesses to easily select and integrate the ones most relevant to them in just a few clicks and manage them in one easy-to-use interface. We also provide anti-fraud, intelligent routing and one-click checkout tools, which help businesses save time, reduce costs and gain the ability to focus on their core business.
Our unique intelligent routing system is an essential feature because it allows us to significantly improve businesses’ payment approval rates. Automatically redirects failed payments through a new payment path, using artificial intelligence to optimize those with the highest approval rating, lowest costs and best user experience.
Founded in Bogota, Colombia, Yuno now operates in 60 countries to serve a global customer base, including McDonald’s, Avianca, inDriveand other companies in hospitality, retail, mobility and other industries.
What are the payments trends we are seeing in Brazil?
Brazil is an extremely interesting market that has seen huge changes in recent years. We’re proud to be at the forefront of the country’s exciting and transformative digital payments revolution, helping to simplify and democratize payment transactions for businesses of all sizes.
Brazil’s digitalization and economic diversification have accelerated the expansion of a growing middle class and fueled the shift from cash-based transactions to digital payments, helping to foster a thriving e-commerce ecosystem. As many as Two-thirds of Brazilians are expected to shop online by 2027bringing the e-commerce market to an estimated value of $125.68 billion by 2029.
Digital financial services, including mobile wallets and neobanksare revolutionizing payment habits, particularly among the unbanked population, while initiatives such as the BR code (the local QR code that standardizes the execution of payments) and open banking system they are improving the security and privacy of payments.
The introduction of Pix in 2020, operated by Central Bank of Brazil Providing instant payments and zero transaction fees for peer-to-peer transfers has had a significant impact on the payments landscape. Pix, one of the payment methods supported by Yuno, now surpasses credit and debit cards as the preferred payment method in the country, with approximately 80% of Brazilian adults use it in their daily life.
Other alternative payment methods such as Nupay, developed by Nubank for international purchases, and digital wallets like PicPay have become equally popular.
What is Yuno doing to improve the payments industry in Brazil and Latin America?
We’re working to support this thriving ecosystem by enabling businesses to more easily integrate a wide variety of regional payment methods without having to have large numbers of IT and payments experts on staff. In doing so, we hope to support financial inclusion by helping businesses of all sizes meet customer preferences, allowing them to focus on managing and growing their core businesses.
As digital payments expand their reach and popularity and cross-border transactions become more frequent, efficient and intelligent orchestration will become increasingly vital. It ensures that every payment option is represented, even as merchants benefit from lower costs of running their businesses and greater reliability and security of their payment transactions.
How does the Brazilian payments sector compare to that of the rest of the world?
The Brazilian payments industry is one of the most technologically advanced and fastest growing in the world. The introduction of the Pix instant payments system has been one of the main drivers of this progress, playing a fundamental role in the financial inclusion of millions of Brazilians and garnering over 160 million users since its launch just three years ago.
This success is now attracting attention in Latin America and beyond. Brazil’s central bank is now exploring deals to connect Pix with platforms in other geographies, with Italy being the latest country to show interest in a bilateral deal.
Looking more generally at the technology ecosystem in Brazil, the Central Bank has adopted regulations that, in most cases, facilitate the operation of fintechs, fueling innovation. The town is now home to the largest number of fintechs of all Latin American countries, with several indigenous startups such as Nubank, Calculation AND PagSeguro having achieved unicorn status, and 57% of Brazilians will express confidence in fintech in 2023.
What are some unique challenges associated with the region/country in the payments space?
Historically, navigating the regional payments ecosystem has been incredibly challenging and expensive for businesses of all sizes. Businesses looking to streamline their payment processes, introduce anti-fraud tools and reduce transaction costs have had to turn to multiple service providers individually, taking up valuable employee time.
We at Yuno have sought to resolve these inefficiencies by creating a single, easy-to-use platform through which businesses can manage and optimize all their payments in one place and ensure transactions are secure.
Focusing on more specific pain points, fraud has been a particular challenge in the Brazilian and regional payments industry. Total fraud in Brazilian retail is expected to exceed R$87 billion by 2024, an increase of 13% compared to 2023, with forecasts suggesting this number could exceed R$99 billion by 2025. anti-fraud mechanisms in our platform, allowing businesses to conduct transactions with confidence, given this increased security.
Access to consumer credit, although improved, represents another challenge. Although 58% of Latinos own a credit card, only 30% have access to other forms of credit, such as loans, insurance or investment products. Steps are being taken to address this issue, but there is still considerable potential for further innovation to improve access to credit and stimulate regional consumption.
Projects for the future (roadmap and growth plan)
Our current focus is to serve our customers well as we expand our reach into Europe, Asia and Africa. We see huge potential in these regions and great scope for Yuno to help businesses more easily navigate local payments ecosystems as we have done across Latin America.
Most recently, we announced our launch in Singapore, Hong Kong, Thailand and the Philippines, as well as our appointment to Jonathan Sala as Yuno’s head of APAC to oversee our regional expansion. Hall brings with him a wealth of experience from his previous roles Quick, PayPalAND Hyperportfoliowhich we are excited to leverage as we work to bring Yuno to more customers.
