Brazil's largest digital wallet PicPay reaches BRL 500 million in credit

One of the next products PicPay is expected to bring to market in the coming months is person-to-person loans

PicPay's headquarters, in Sao Paulo. Photo: PicPay/Courtesy
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  • The move shows how PicPay is moving to try to keep recurring and monetizing its user base;
  • According to the company, of its 55.4 million registered users, 27.3 million are considered active.

Brazil‘s fintech PicPay has reached BRL 500 million in credit through its platform in three months of operation, with the country’s largest digital wallet expanding the shelf of financial products to monetize its 55 million customer business.

Operations, for now, involve personal credit transactions from Banco Original, explained PicPay Card and Credit head Frederico Trevisan, but should include other banks and fintechs in the coming months. Both Banco Original and PicPay are controlled by J&F, which also owns JBS (Brazilian company and the largest meat processing company in the world).

READ ALSO: Latin America’s largest digital wallet, PicPay buys 100% of the finance app Guiabolso

The move shows how PicPay is moving to try to keep recurring and monetizing its user base, which has leaped since last year, driven by social isolation to stem the COVID-19 pandemic, which catalyzed demand for digital payment solutions.

According to the company, of its 55.4 million registered users, 27.3 million are considered active, meaning they have used the app at least once in the past three months. Of these, 15.3 million of them are said to be transactional, they have made transactions that can earn revenue for PicPay.

READ ALSO: The promises of Brazilian open banking: customer empowerment and market opening

The move also comes just over a month after PicPay bought the personal finance portal Guiabolso, weeks after it suspended its Nasdaq listing plan.

As well as giving access to a broad customer base, many of them with their first bank account, PicPay wants to attract traditional banks and credit fintechs with service offerings such as extra artificial intelligence capabilities to measure credit risk and a central collection desk.

“Our model works in a way that participates in the success of whoever offers credit,” Trevisan told Reuters, explaining that PicPay receives a fee when originating transactions and additional installments as installments are paid.

READ ALSO: Brazil has 200 million digital accounts and a challenge: how to make them actually used

Founded in Brazilian city of Vitória in 2012 as a digital wallet, PicPay gained strength after being bought by J&F, starting to act as a financial marketplace, digital shop, and ad portal.

Last year, it began to intermediate the sale of financial products with credit cards, also from Banco Original. Currently, the card base is 10 million customers.

One of the next products that PicPay should bring to the market in the coming months is loans between people, a model that has already been operating as a pilot project for a fortnight in Vitória, through another arm of the J&F group, the financial Credinovo.

PicPay was planning an initial public offering (IPO) on Nasdaq this year, expecting to reach a market value of around $20 billion, according to media reports. As it realized that investors were offering a much lower valuation, the controllers backed out of the deal. J&F then announced a plan to invest BRL 3 billion in PicPay by 2023.

(Translated by LABS)

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