Market Trends of Brazil Real Time Payments Industry
This section covers the major market trends shaping the Brazil Real Time Payments Market according to our research experts:
P2P Real Time Payment is expected to Drive Market Growth
- Peer-to-peer (P2P) payment systems allow users to transfer money from their mobile devices through a linked bank account or card. Peer-to-peer services advance technology to overcome the transaction costs of trust, enforcement, and information asymmetries that have traditionally been addressed by using trust third parties.
- The P2P payment services & mobile apps have been used across the country. The proportion of online transactions using these methods is growing with each passing year, and this trend is witnessing growth in the forecast period. Moreover, various efforts by the Brazilian government to promote digital payments through the launch of Pix will also boost the Real-time payment market.
- For instance, In May 2021, the Brazilian government allowed the re-launch of Facebook's WhatsApp P2P payments in the country. Moreover, in May 2022, Whatsapp announced the launch of its "Pay" button for the users of Brazil. The Pay button will make the payments more accessible and easier to use to promote engagement with the digital economy, connect with family and friends, and transfer money without fee deductions.
- Furthermore, market players are launching various payment services to expand real-time payment use across the country. In December 2021, Clara, a fintech solution provider, announced its arrival in Brazil. Iw was backed by a series B financial round, with an investment of USD 70 million, led by Coatue, an investment technology company.
- Organizations in the country are looking forward to introducing new digital payment solutions through their strategic partnerships. For instance, In December 2021, Worldline announced a partnership with Bexs Pay, one of the leading Brazilian payment firms, to introduce a cross-border remittance product for digital payments from Brazil. The product will increase the volume of online payments in Brazil.
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Real Time Payment market demand increased during COVID-19
- During the COVID-19 pandemic, most organizations closed their offices, so the companies adopted an online working mode. This, in turn, has increased internet and smartphone penetration. During the COVID-19 lockdown, banks followed several restrictions and were operational only on alternative days. Since because of these issues during COVID-19, there was an increased demand for mobile-based real-time payment services.
- The Brazillian government is seeking partnerships with other countries to help boost and develop its digital infrastructure. For instance, in January 2021, Brazil announced its partnership with the United Kingdom to accelerate digitalization and innovative solutions in public service delivery in Latin America. This partnership will focus on data governance and accessibility as well as planning and strategic implementation of digitization projects, including financial services.
- Furthermore, in March 2022, Brazil enhanced its digital strategy to provide interaction between public sector agents working on digital transformation and the startups.
- In April 2021, the Inter-American Development Bank (IDB) approved a credit line of up to USD 1 billion to help Brazil push forward with its digital transformation strategy. This will provide better connectivity, rising adoption of new technology by private organizations, and development in public services.
- Although the COVID-19 pandemic may have delayed the rollout of some of the Central Bank's initiatives, its challenges have also emphasized the importance of digital payment solutions for Brazilian businesses and consumers. For instance, in October 2020, the Central Bank issued regulations on a new type of payment institution - payment initiation service providers - PISPs. The PISP regulations allow new players and suppliers of technological innovations to enter the payments market by offering services that merely initiate payments and transfers from transaction accounts held in other institutions. Through mobile apps provided by PISPs, users can consult and initiate financial transactions, even though the PISP does not handle funds and manage transaction accounts.
