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volume 8 • spring 2015
Learning Latin america
in Brazil since the 1970s, and is one of the first to provide meal voucher programs and other employee benefits. But, Brazil didn’t become Edenred’s largest market overnight.
“Brazil is like the U.K. in the early 2000s when PrePay Solutions started prepaid programs. We thought prepaid programs would be easy because they were just about payments, but we didn’t
fully consider cardholder cost of acquisition, churn, the operations behind [card] activation and reload- ing, and loyalty programs, among other factors,” says Coccoli, who used to be at PPS, a joint venture of Edenred and MasterCard.
Not only do companies have to educate themselves about the country and its culture, they need to educate consumers about pre- paid products, Coccoli says. He adds that, although the market is huge and the payments infrastruc- ture is ready, companies need to prepare for the long haul because product penetration could prove difficult and there won’t be a quick return on investment.
NovoPayment’s Pérez agrees that business success in Brazil isn’t a short-term venture or as lucrative as companies’ businesses in other regions. “There’s little in the way of immediate gratification; but staying out of Brazil or delaying entry probably aren’t very good ideas, especially for large compa- nies... because of the market size, new legal certainty around elec- tronic payments and the historical
inefficiency inherent in cash man- agement,” she says.
Pérez suggests working with companies already doing business in Brazil. Succeeding in Brazil
“is more than a part-time project. This work has to be done by dedicated people. Work with companies that have done it before,” she adds. “The outcome will be better; I promise you.”
Brazil Awaits
No market is perfect and Brazil has its share of challenges. But it could be worth the effort.
“Much of the industry is focused
on Asia-Pacific countries [because] the populations are large and the opportunities are great,” says Mer- cator’s Hugo-Webb. Although pay- ments companies increasingly are looking at Latin America, he doesn’t believe the region is getting its
due. Mobile payments hold promise because of the unbanked and under- banked consumers, especially those in rural areas who don’t have con- venient access to banking services, he adds.
Glaucon Pereira, director, Blackhawk Network Brasil S.A., also is emphatic about Brazil, citing the growth of retail distribution of GPR cards and initiatives by mobile operators in
the country as two examples (see sidebar on page 60.) “Brazil is and will be a land of opportunity in the near future for our industry, as we continue to educate consumers, retailers and distribution partners,” he says.
A supporter of the opportunities in Brazil, Anabel Pérez, founder and CEO, NovoPayment, received a Paybefore Industry Achievement Award for her contributions to expanding prepaid in Latin America. Miami-based NovoPayment has created one of the largest network branded prepaid portfolios of any nonbank in Latin America, working with thousands of clients in Mexico, Venezuela, Peru and Colombia.
What has your experience across Latin America taught you about the ability for prepaid, particularly when combined with mobile capabilities, to serve unbanked/ underbanked consumers?
We’ve learned that it’s a proven formula that’s catching on; however, at a slower pace than anyone would like. The people that
are serious about making mobile pay- ments a reality are more aware today of the technical and economic challenges than they were even 18 months ago, and the ones that have compared prepaid to other alterna- tives see the benefit pretty clearly.
I think the argument for debit as a funding source and technical choice for an unbanked play is pretty
much dead, but there are still many people in decision-making cap- acities that are yet to come to the realization. The larger challenges are in how you approach sales
and distribution.
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