Em Conversa Paytech South America

Em Conversa: Developing E-commerce Payment Methods With PayU

Em Conversa looks to uncover the secrets in Latin America (LatAm) that have caused the fintech market to boom, from being worth less than $50million in 2016, to $2.1billion in 2022. This week we spoke to Francisco Leon, CEO of PayU LatAm about the evolving payments space in Colombia and why the country, as well as the region as a whole, is such a good place for organisations to expand into.

PayU is the payments and fintech business of Prosus, a global consumer internet group and one of the largest technology investors in the world. PayU is an online payment service provider, operating in 50+ high growth markets, dedicated to creating financial services tailored to the needs of over 450,000 merchants and millions of consumers. Focused on empowering people through financial services and creating a world without financial borders where everyone can prosper,  PayU has invested over $1billion to date into the fintech space.

As an online payment service provider, it deploys more than 400 payment methods and PCI certified platforms to process approximately 3.2 million payments every single day. It also specialises in innovative consumer and small business products that improve access to credit and banking services in markets that are underserved by traditional financial services providers.

Francisco Leon, CEO of PayU LatAm 
Francisco Leon, CEO of PayU LatAm

In 2017, Francisco Leon joined PayU LatAm after working in the risk and credit management divisions of Falabella Bank in Colombia for 10 years. Due to his experience as global risk director and finance director of LatAm, Leon led all Brazilian Operations in 2019 as COO and in 2020, he assumed the challenge of unifying payments in Latin America (seven countries in one region). Currently, Leon leads the PayU Business in Latin America.

In April 2022, PayU announced it had acquired Ding, a Colombian payments fintech, as well as participated in a global funding round for Treinta. We sat down with Leon to get a better understanding of why the Colombian fintech market is so promising and what makes it different to other countries: 

Why has PayU chosen to make those acquisitions in Colombia and why will other companies follow suit in making their own acquisitions?

There are several reasons for our investments in Colombia. First, both Ding and Treinta offer businesses simple and compelling omnichannel payments solutions. They are therefore a great fit with our core strategic goal of creating a world without financial borders.

Second, while these companies are headquartered in Colombia, they operate across Latin America. That is important because it provides us with ever further reach at a time when the Latin American e-commerce market is booming ‒ the region is expected to reach more than 260 million digital shoppers by the end of this year, overtaking the US.

As for whether other companies will make their own investments or acquisitions in Colombia, only time will tell. I would be surprised if they didn’t. Colombia is currently the fifth largest market for e-commerce in the region, so there’s plenty of scope for growth. As discussed, it’s also a great gateway into the wider Latin American market if you make the right investments.

How does the Colombian market differ from the rest of the region’s fintech?

Throughout 2021, Colombia has had one of the best fintech adoption rates in Latin America, with 48 per cent of the population using such services. The industry since 2019 has grown at rates of 56 per cent per year.

This is because there is a continuing demand for non-traditional financial services across the region; according to the analysis in the industry, it is evident that by 2022, 48 per cent of urban Colombians and 59 per cent of rural Colombians will use financial services.

The global economic recovery has been a major factor in the adoption of fintech, particularly when it comes to e-commerce. This is partly due to governments using digital wallets and electronic payment systems to disperse stimulus money and welfare payments.

Our own data backs this up. PayU’s monthly buyer base in Colombia grew by 49 per cent from 2020 to 2021, and taking into account the first five months of 2022, we registered a 39 per cent growth compared to 2021. The continuous growth of the electronic commerce market indicates that by 2022 the financial goals of past years will be exceeded, having an increase of 53 per cent vs. 2021 and 2020. And this happens in a similar way throughout Latin America, although there are some differences. For example, in Colombia, the payment service PSE experienced a market share of 66 per cent in 2021 and at the same time the use of credit cards decreased. In contrast, in Argentina, the credit card market share increased by 48 per cent in 2021 compared to 2020.

What are some unique challenges in the Colombian fintech market?

We are looking forward to higher access possibilities for payment methods. The ones available at the moment can reach a part of the population but haven’t been adopted by the majority. Because of this, with the purchase of Ding, we can now participate more actively by providing payment methods that allow us to capture a higher number of Colombians that become active e-commerce consumers.

We work with the big markets from Colombia, the acquirers, the banks, and that’s where a path opens to solve what adoption is; the pandemic showed the markets that they had to activate their digital channel, but the big challenge is to active the adoption and recurrence of consumers.

On the other hand, after launching the ‘Juntos somos más fuertes’ program in 2021, we are now launching ‘Payudarte’ which proclaims that it doesn’t matter where the consumer is, the digital channel is an economy activator to any entrepreneur for starting on the e-commerce path.

We settled an arrangement with Credibanco for the purchase of Tecnipagos, which works like Ding, the operation is currently under the authorities’ approval. What’s the goal? To keep strengthening payments in Colombia.

We are part of the payments chain and we would enter the financial regulated world for the adoption of digital payments in Colombia, and on the other hand entering to support the small and medium business segment which has more requirements like administrating money, having an account to allow transactions, Ding is going to allow this to complement our value offer.

What have the developments of e-payments been like in LatAm and Colombia specifically?

Along with the rest of Latin America, a significant proportion of Colombians are unbanked. Financial inclusion is therefore a top priority for the government here in Colombia and others elsewhere in the region, particularly when it comes to their digital strategies. In Brazil and Mexico, the pursuit of digital inclusion led to regulatory changes that helped drive payments innovation, and a similar thing is now happening in Colombia with Decree 169 of 2020, a regulation that will enable the financial system to expand. We’re also expecting an Open Banking law to pass this year, which will make it easier for fintechs to disrupt the market and for incumbents to team up with fintech partners to better serve customers.

Anything else about the LatAm or Colombian fintech market you’d like to share?

Looking specifically at the payments market for e-commerce, it’s important to remember that merchants’ and consumers’ payment needs vary widely between countries. Credit cards are still king due to their ability to pay for domestic and international purchases in instalments, but debit cards are also increasing market share as consumers grow wary of prolonged economic uncertainty.

Then there are cash-based payment methods for e-commerce, such as BoletoBancario in Brazil or Oxxo in Mexico, which are useful for underbanked populations. Challenger banks are increasingly giving these services a run for their money by offering digital bank accounts and payment cards, while fintechs are launching e-wallets and prepaid cards targeted at the underbanked.

There are also QR codes and ‘Pay by link’ payment methods, which are becoming key tools for small businesses to accept online payments; they enable digital payments without the need for a website. The bottom line is that Latin America is a highly complex market with a wide range of payment options. That’s why we’re focused on making things as easy as possible for merchants and the customers they serve.


  • Francis is a journalist and our lead LatAm correspondent, with a BA in Classical Civilization, he has a specialist interest in North and South America.

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