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The next steps for PicPay, Latin America’s biggest digital wallet

. Feb 22, 2021
picpay fintech brazil Photo: Brenda Rocha/Blossom/Shutterstock

More than 41 million Brazilians use homegrown mobile payment app PicPay. Launched back in 2012, the digital wallet platform doubled its user base last year, processing a total of BRL 49.6 billion (USD 9 billion) in payments and making PicPay the largest app of its kind in Latin America. Beyond enabling users to send and receive money, pay bills, and store loyalty cards and discount coupons, PicPay is now planning to become a “super app,” developing a broad ecosystem with a wide range of business lines. This month’s planned launch of an in-app messaging service is another step in that direction.

PicPay already allows users to share their activities and “follow” others, but has no option to interact between accounts.

This social aspect of the app will be strengthened by the new messaging service, supplementing the platform&#8217;s online marketplace strategy, launched three years ago.</p> <p>There are currently 70 brands selling products and services directly through the so-called PicPay Store. In the last year, customers made over 25 million transactions on this marketplace — and the plan is for a considerable increase in 2021.</p> <p>“Recently, we began the process of opening up our platform, which will allow each seller interested in integrating into PicPay Store to develop a customized experience, providing fast and structured growth,” said Anderson Chamon, co-founder and vice president of Products and Technology at PicPay, in an interview with LABS. Fábio Plein, former general manager of Uber Eats in Brazil, <a href="https://valor.globo.com/financas/noticia/2021/01/19/picpay-traz-ex-uber-para-liderar-area-de-marketplace.ghtml">was brought in</a> to <a href="https://valor.globo.com/financas/noticia/2021/01/19/picpay-traz-ex-uber-para-liderar-area-de-marketplace.ghtml">further the company&#8217;s marketplace strategy</a>.</p> <p>Beyond its new messaging feature and the PicPay Store, the company is embarking on another two fronts of monetization and growth: advertising — as its user base is already large enough to draw the interest of other brands — and financial services, with possibilities that go far beyond sending and receiving payments.</p> <h2>PicPay branches into lending and investment</h2> <p>Earlier this year, to attract more users and encourage increased use of its digital wallet, PicPay increased its yields on fixed deposits from 100 percent of the Interbank Deposit Certificate (CDI) rate to 210 percent — showing that the company is taking its first steps toward offering investment services.</p> <p>In January, the company announced hitting <a href="https://labsnews.com/en/news/business/brazilian-leader-in-digital-wallets-picpay-reach-the-mark-of-2-million-cards/">the milestone of 2 million credit cards</a> issued to its users. The cards bear the PicPay brand but are actually operated by <a href="https://labsnews.com/en/news/business/neobank-original-profitability-brazil/">Banco Original</a>, a fintech that became a partner in 2015 and holds a 22.70 percent share of the business. The other controlling shareholders of <a href="https://picpay.com/site/sobre-nos">PicPay</a> are J&amp;F Participation — from the J&amp;F group that also owns Banco Original — with a 9.66 percent stake, and José Batista Sobrinho, founder of agribusiness giant JBS, which gave rise to the J&amp;F group, with 67.64 percent.</p> <p>Also in February, Mr. Chamon said PicPay would launch its first credit product. CEO José Antônio Batista told news website <a href="https://neofeed.com.br/blog/home/picpay-quer-ser-o-wechat-do-ocidente-e-lanca-uma-grande-ofensiva-para-isso/">Neofeed</a> the service will consist of peer-to-peer lending, with users borrowing from other PicPay clients. “To continue to grow steadily and in an orderly manner, we are going to focus on the <a href="https://brazilian.report/newsletters/brazil-daily/2020/10/29/fintechs-sidestep-the-economic-crisis-in-brazil-raise-over-usd-1-billion/">development of our ecosystem</a>, both in the financial sector and the other fronts in which we operate,” Mr. Chamon told LABS.</p> <p>The company has not revealed its total payment volume target for 2021. But, regardless of what it may be, PicPay has the capital to get there. In February, t<a href="https://labsnews.com/en/news/business/brazilian-picpays-capital-rises-to-brl-841-million/">he Central Bank approved a BRL 259 million (USD 47 million) capital increase for the company, raising its total stocks to </a>BRL 841.246 million. The extra amount came from an investment by the J&amp;F group.</p> <p>PicPay intends to reach 100 million users within the next three years. To do so, it will need to hire more personnel, particularly in its tech departments.</p> <p>“There are more than 2,000 employees and, of this total, 1,000 work in technology. By the end of the year, we will have 3,500 employees, and 2,500 of them will work in technology. We are part of a robust holding company, and we understand that the current moment requires us to focus efforts on our growth,&#8221; added Mr. Chamon.</p> <h2>How does PicPay work?</h2> <p>PicPay is a digital wallet service that allows clients to pay for goods and services using QR codes, now accepted by more than 3.5 million businesses across the country. Users can register their credit cards on PicPay or add checking account funds to a digital wallet. Beyond these traditional methods, clients can also make deposits via bank-issued invoices — a widely used payment method in Brazil — or pay via the <a href="https://brazilian.report/podcast/2020/11/04/explaining-brazil-podcast-banking-instant-payment-pix-up-steam/">Central Bank&#8217;s instant payments system PIX</a>.&nbsp;</p> <p>Back in September, the company launched the PicPay Card, a digital card that promises 5 percent cashback on purchases.</p> <h2>PicPay&#8217;s plans beyond its borders</h2> <p>While PicPay is the largest digital wallet in Latin America, it is still only available in Brazil. And the company&#8217;s international strategy is not yet clear. When asked about the company’s plans for Latin America, Mr. Chamon says that, for now, the company’s focus remains on the domestic market. “We will always be attentive to the company’s growth opportunities, but at the moment, our focus is on developing Brazilian operations,” Mr. Chamon explains.</p> <p>On Friday, newspaper <a href="https://economia.estadao.com.br/blogs/coluna-do-broad/picpay-contrata-btg-para-ipo-e-vai-escolher-entre-b3-e-nasdaq/">O Estado de S.Paulo </a>revealed that PicPay hired asset manager BTG Pactual to coordinate the company’s future IPO. Last week, Mr. Chamon told LABS that an initial public offering is a &#8220;natural path for technology companies with strong growth, such as PicPay.&#8221; However, he stressed it is not the company&#8217;s main priority.</p> <p>&#8220;We are not talking about [an IPO] at the moment, and the same is true for the issue of acquisitions. Our main focus continues to be the development of operations and the company’s growth.&#8221;</p> <hr class="wp-block-separator"/> <p class="has-text-align-center"><a href="https://labsnews.com"><em>This article was originally published on LABS – Latin America Business Stories, a news platform covering business, technology, and society in the region for an English-speaking audience</em></a></p> <figure class="wp-block-image size-large"><a href="https://labsnews.com/en/"><img loading="lazy" width="1024" height="124" src="https://brazilian.report/wp-content/uploads/2020/06/labs-banner-_2x-1024x124.jpg" alt="https://labs.ebanx.com/" class="wp-image-41934" srcset="https://cdn-statics.brazilian.report/wp-content/uploads/2020/06/labs-banner-_2x-1024x124.jpg 1024w, https://cdn-statics.brazilian.report/wp-content/uploads/2020/06/labs-banner-_2x-300x36.jpg 300w, https://cdn-statics.brazilian.report/wp-content/uploads/2020/06/labs-banner-_2x-768x93.jpg 768w, https://cdn-statics.brazilian.report/wp-content/uploads/2020/06/labs-banner-_2x-610x74.jpg 610w, https://cdn-statics.brazilian.report/wp-content/uploads/2020/06/labs-banner-_2x.jpg 1320w" sizes="(max-width: 1024px) 100vw, 1024px" /></a></figure> <p>

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Fabiane Ziolla Menezes

Fabiane is a journalist and editor-in-chief of LABS

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