Visa aims at PIX to expand business beyond cards in Brazil

"Our goal is for technology services to represent double digits of our revenues," Fernando Teles told Reuters

13.Oct.2020 19:22 BRT

Visa will offer fraud prevention and transaction authentication services to PIX participants;
More recently, the company has begun to provide services for indoor payments based on blockchain and to process transactions carried out by smaller card brands in the United States.

Visa is selling fraud prevention and transaction authentication services to participants of PIX, the Brazilian instant payments service, as part of the global plan to be known as a technology company rather than just a card brand, said the company’s president in Brazil.

The strategy should involve offering services in Brazil from companies acquired by Visa in recent years in several parts of the world, such as the digital transfer startup Plaid, in January, and EarthPort, for international remittances, in 2019. In Brazil, Visa had already invested in Conductor, also of digital payment.

Global payments companies are taking steps to keep pace as financial transactions with debit and credit cards are rapidly facing competition from a range of other digital payment methods. Visa already sells solutions for the instant payments market in India, Russia, and the United Kingdom.

At the same time, Visa has recently started to provide services for payments in closed environments based on blockchain and to process transactions made by smaller card brands in the United States.

“In the long run, these services will account for a significant share of Visa’s revenues, said Teles.

Opened last week for registration, PIX has already had around 30 million keys registered, according to data from Brazil’s Central Bank. The system, which will allow bank transfers 24 hours a day, every day of the year, officially starts running in November.

In addition to slip into PIX, Visa and rival MasterCard take part in another payment method, via WhatsApp, which the Central Bank, for now, has authorized only in the testing phase. The fee expected to be charged on merchants is 3.99% on the value of the transactions.

“It is a competitive rate, considering that on other channels, the rate is higher,” said Teles.

Hitchhiking in expanding segments can also help offset recent impacts of the Covid-19 pandemic, which in the case of Visa made the company experience a drop in global revenues and profits in the quarter ended in June, the first year-over-year decline since the company went public in 2008.

In Brazil, said Teles, the drop in the volume of transactions through Visa-branded cards reached about 40% in April, in the annual comparison. With the gradual alleviation of quarantines in several states of the country, the pace has recovered and, in the last weeks, it is even higher than in the same stage of 2019.

According to the executive, one of the factors that contributed to this fast recovery was the perception that a large part of payments migrated to e-commerce, which required a rapid response.

“We changed the transaction approval process during the pandemic, which was more detailed before, but was updated because consumption habits have changed,” said Teles.

Translated by LABS