Brazil’s dynamic payments market attracts Airwallex | PaymentsSource

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Brazil's digital payments market is maturing quickly , making it an investment target for Visa, Microsoft and other international companies. Sensing an opportunity, payments and financial platform Airwallex is preparing for expansion in Brazil as part of a wider move to boost its footprint in Latin America.

Airwallex is in the "early stages" of securing a license to operate in Brazil and hopes to be operating in the Latin American country by 2025 "at the earliest," said Ravi Adusumilli, executive general manager of the Americas for Airwallex. "We have a handful of people with boots on the ground in Brazil to run that process for us," he said, noting that the process was "pretty streamlined, organized, [and] well defined."

Still, obtaining a license is no walk in the park, Adusumilli said. "I wouldn't say it's difficult or I wouldn't say it's super friendly either. These things take time."

Payments companies looking to do business in Brazil need a license from the country's central bank, the Banco Central do Brasil, said Reed Luhtanen, executive director of the Faster Payments Council, a payments industry-led association and consultant.

The BCB also is responsible for managing and regulating the country's instant payments system, called Pix . Pix launched in 2020 and processes 15% of the world's real-time payments, trailing only India's United Payments Interfact, which covers 46% of the global market, according to ACI Worldwide.

"Every account is connected to that system. So, if you're banked in Brazil, you're able to send money to anybody else who's also banked in Brazil within seconds," Luhtanen said. "Along with that foundational layer – if you think about that as the plumbing – they also have a standardized QR code implementation that allows for lots of different use cases to be supported by that system."

Pix "has opened up the door for a lot of innovation and a lot of different players to get into that space and provide that user-experiential layer," Luhtanen said.

In July this year, over 5.4 billion transactions flowed through Pix, according to the BCB.

Once licensed, Airwallex will be able to send payment to Brazilian merchants or service providers in Brazilian currency, open bank accounts with Brazilian financial institutions, accept payments from parties in the country, and offer other treasury and cash management services, Adusumilli said.

The planned Brazilian expansion comes on the heels of a wider expansion into Latin America. Last October, Airwallex agreed to acquire Mexico-based payments service provider MexPago, which was already a licensed payments provider in the country.

"We see global redistribution of supply chains and production for whatever reason moving into Latin America, into Mexico. Money movement will be there. We need to be there," Adusumilli said.

Airwallex keeps local compliance in mind when deciding the best avenue to enter a market, he said. "When we looked at what's the best, most compliant way to be there, specific to Mexico we realized an acquisition was the best way. In Brazil we thought maybe we can do our own organic way."

In another deal this week that demonstrates the local opportunity, PayPal Ventures joined a $15 million investment round in Brazilian credit platform Ume, Brazil Journal reported today.

Airwallex is also looking to expand to France, Japan, Saudi Arabia and the United Arab Emirates, Jack Zhang, co-founder and CEO said in an Aug. 15 company update.

"Global trade is more important than ever, but the paths of supply chains and employment are shifting among rapidly evolving geopolitical pressures and opportunities around the world," Zhang said. "Our team closely tracks these so-called reglobalization trendlines, and works to get ahead."

Airwallex has 60 licenses around the world, Zhang said in the update. That includes China, where it is one of two foreign companies, including PayPal, to hold an online payments license, said Stacey Zolt Hara, head of global corporate affairs at Airwallex.

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