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Em Conversa Fintech Ecosystems South America

Em Conversa: Supporting LatAm Payment Innovations With i2c

As of April 2023, there were 1,000 active fintechs in Latin America (LatAm) with a vast majority focusing on financial inclusion, tackling the issue of 70 per cent of the population not having access to formal financial services. Em conversa looks to uncover what the future of fintech could look like in the region, following a $2.1billion valuation in 2022.

Here, Ray Merceron, general manager of sales, LAC region at i2c, the global payment processor, breaks down how Latin America’s payment market is evolving, its challenges, as well as i2c’s plans in the region.

Can you provide a deeper insight into i2c and the significance of your position within the company?
Ray Merceron, general manager of sales, LAC region at i2c
Ray Merceron, general manager of sales, LAC region at i2c

i2c’s mission is to responsibly help our clients remove barriers to innovation. We help financial institutions and fintechs of all sizes build a competitive edge in today’s fast-paced world— without compromising on quality or functionality.

Our unified banking and payments platform provides a solid foundation for delivering differentiated offerings that cater to each customer with the flexibility and agility to quickly respond to the unexpected.

As for my role, I spearhead the expansion of our customer base across North America and Latin America. Having been with i2c for seven months as the lead in sales, my background includes two decades at Mastercard, which equips me with a deep understanding of the payments industry. My goal is to leverage this experience to drive growth and foster solid client relationships in our target markets.

Latin America’s payment technology landscape is evolving rapidly. What trends are most impactful in the region?

The paytech scene in Latin America is indeed burgeoning with innovation and growth. We are witnessing a significant surge in contactless and digital payment adoption. Financial institutions on both the issuing and acquiring sides are heavily investing to scale up digital payments. They are rolling out contactless cards and enhancing terminal infrastructure across key Latin American markets.

This shift is propelling an increase in low-value payment transactions, effectively displacing cash from the equation. Another key trend is the rise of P2P payments. Alternative payment methods and e-wallets are revolutionising how people transact, providing near real-time fund transfers. Brazil’s PIX system is a testament to this trend, symbolising the region’s embrace of modern payment solutions.

i2c is known for its proactive role in advancing the payments sector. Could you elaborate on the specific actions i2c is taking to enhance the payments landscape in Latin America?

i2c is deeply committed to revolutionising the payment sector in Latin America through a three-pronged approach:

  1. Elevating Customer Experience: We’re enabling our clients to launch highly differentiated products swiftly and efficiently. Our platform’s inherent flexibility allows for quick configuration updates, bypassing the need for extensive technical deployments. This agility ensures that our clients can offer digital and mobile experiences that rival the best globally.
  2. Boosting Profits and Mitigating Risks: Innovation is at the forefront of our strategy. We aim to keep our clients at the cutting edge, facilitating quicker routes to revenue and nurturing deeper customer relationships. Our suite includes automated credit decisioning, virtual cards, personalised rewards, real-time coupons, and a comprehensive set of risk management tools, all enhanced by AI technology.
  3. Agility and Speed to Market: Our modular platform architecture is a game-changer. It requires no coding and is built from over 100,000 pre-coded building blocks. This allows our clients to quickly configure and optimise their offerings for rapid market entry using our global SaaS platform.
How does the LatAm payments sector compare to that of the rest of the world?

Latin America’s payment sector is swiftly evolving, catching up with global standards through rapid innovation and a proactive approach to digitalisation. Overcoming traditional barriers, such as high unbanked rates and cash reliance, the region has become a hub for fintech growth, often outpacing more developed markets in adopting technologies like mobile wallets and real-time payments. Brazil’s PIX and other initiatives reflect a decisive shift toward immediate payment systems.

Moreover, the region’s approach to digital transformation in payments is often more open and collaborative. Regulatory frameworks, like Mexico’s Fintech Law, are also fostering a supportive environment for innovation, with a clear focus on inclusion and accessibility.

In terms of infrastructure, while there’s still ground to cover compared to some advanced economies where digital payments are nearly ubiquitous, the gap is closing swiftly. We are witnessing significant investments in contactless technology and payment security, propelled by the pandemic’s push for low-touch transactions.

What sets Latin America apart is not just the speed of adoption but the innovation in its approach. There’s a vibrant interplay between fintech startups, traditional banks, and tech giants, all converging to create a unique ecosystem that is tailored to the local needs and culture. As a result, payment solutions are not just imported but crafted within the region, ensuring they are well-suited to LatAm’s diverse markets.

Every market has its peculiarities. What unique challenges does Latin America present in the payments space?

Latin America’s payment sector faces distinct challenges that stem from its unique economic and social fabric. A significant portion of the population remains unbanked or underbanked, which poses a hurdle to financial inclusion and the broader adoption of digital payment methods.

Moreover, as financial institutions, fintechs, and governments work to develop alternative payment methods and e-wallets, interoperability becomes crucial. It’s not just about introducing new technologies but ensuring they work harmoniously to scale the industry and accelerate digital payment adoption across the region.

Looking ahead, what are i2c’s strategic plans for growth and development in the Latin American market

i2c’s roadmap for Latin America is marked by strategic investments in human resources and focused market engagement. We are intent on bolstering our presence by concentrating on pivotal markets and segments where our products and services can have the maximum impact. Our spotlight will be on regions such as the Caribbean, Central America, Mexico, Colombia, Peru and Chile. In terms of segments, we will continue to engage with a diverse clientele, including financial institutions, fintechs, as well as credit unions, ensuring that our solutions cater to the varied needs of the market.

In light of the developments and challenges in the Latin American payment sector, what are your final reflections on the role and future of i2c in the region?

The Latin American market is teeming with potential. Financial institutions and fintechs are at a pivotal point where the need to modernise and upgrade their payment platforms is both a challenge and an opportunity.

i2c is not just offering payment solutions but is paving the way for a more inclusive and technologically advanced financial ecosystem. Our goal is to bridge the gap between the current market state and the future of payments, where every transaction is seamless, secure, and accessible to all segments of society. This vision for a digitally empowered Latin America is what drives i2c’s commitment to the region, and we’re excited about the role we will play in shaping this future.

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