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Payments are about People · Data Talks

• 0:13
  SPEAKER_00: Welcome everybody to another session and show of Data Talks.
• 0:18
  SPEAKER_00: This is Data Talks with a leader from the South, with I think our first Brazilian guest at the show, Miss Estelita Haas.
• 0:28
  SPEAKER_00: Welcome to the show.
• 0:29
  SPEAKER_01: Thank you, Wolfgang.
• 0:30
  SPEAKER_01: I'm really really glad to be here.
• 0:33
  SPEAKER_01: I'm a deep admirer of your work at Word Data Lab, so it's a pleasure to talk to you all.
• 0:39
  SPEAKER_00: Estelita, the same goes here.
• 0:41
  SPEAKER_00: And for those who don't know, Estelita is the manager for product, markets, and business intelligence of eBank, which I think is fair to say is a fast-growing unicorn out of Brazil.
• 0:52
  SPEAKER_01: Correct, yes.
• 0:53
  SPEAKER_01: Yes, we are based in Brazil and currently operating in 20 plus countries across emerging markets across the globe.
• 1:01
  SPEAKER_00: So, Estelita, tell us a bit about your story.
• 1:05
  SPEAKER_00: The beginning of the show is always the person behind the numbers.
• 1:08
  SPEAKER_00: You have been there growing the business from e-BAX for more than seven years before you were a journalist.
• 1:14
  SPEAKER_00: Tell us how that journey was, your professional journey, but also then the journey at e-Banks.
• 1:19
  SPEAKER_01: Sure.
• 1:21
  SPEAKER_01: So I my background is as a journalist, as you said.
• 1:25
  SPEAKER_01: As a journalist, I've always been drawn to the stories that no one is telling.
• 1:30
  SPEAKER_01: I think this is common to most journalists.
• 1:32
  SPEAKER_01: We want to tell the stories that are overlooked, that no one is telling.
• 1:37
  SPEAKER_01: So, and I actually spent most of my career as a journalist working uh on outlying regions of Brazil, so far from the economic centers of São Paulo, Brazilian Rio.
• 1:48
  SPEAKER_01: And I think this uh really brought me this feeling of hmm, there are a lot of good stories out there that nobody is looking at.
• 1:57
  SPEAKER_01: Uh, and when I started working with payments, this was seven years ago, um, I what attracted me was also this feeling that there was a story there that no one is telling.
• 2:09
  SPEAKER_01: And that story is even more fascinating when you think about emerging markets, because emerging markets are also kind of overlooked.
• 2:16
  SPEAKER_01: And when you look at payments, payments are basically uh the invisible structure behind how people make decisions, that the it's the invisible business lever, you know.
• 2:27
  SPEAKER_01: So they're both kind of uh overlooked.
• 2:30
  SPEAKER_01: Uh, and I really got passionate about payments.
• 2:33
  SPEAKER_01: I started working at e-Banks uh seven years ago because you know, e-Banks was I have I have the luck of having this amazing company uh headquartered in my hometown.
• 2:43
  SPEAKER_01: So I'm here talking to you guys from Curitiba, from southern Brazil, uh from the headquarters of e-Banks.
• 2:51
  SPEAKER_01: And I've never expected really to be that passionate about payments, but at the end, I really see that payments are about people.
• 2:59
  SPEAKER_01: So, as I said, it's uh how they uh choose to pay uh their needs, their ability to access what they want.
• 3:08
  SPEAKER_01: Um, and again, uh it's about people.
• 3:11
  SPEAKER_01: So telling stories about people always uh fascinated me.
• 3:15
  SPEAKER_01: Um, and that's how I ended up uh at working with payments, uh focused on emerging markets, really drawn by by people and by data.
• 3:27
  SPEAKER_00: That's wonderful, and actually reminds me, Estelita, for those of you who don't know, I lived also a part of my life in Africa and MPESA, which is one of the other trailblazers, uh, coined the term changing lives, right?
• 3:39
  SPEAKER_00: And you say payments is about people, and it's a wonderful connection that you just made there.
• 3:44
  SPEAKER_00: Um, you also highlighted a lot what's called the digital south now, because the digital companies are in the north, and basically in the US.
• 3:52
  SPEAKER_00: Tell us a bit about your vision of the digital south and how e-Banks fits in there.
• 3:58
  SPEAKER_01: Yeah, sure.
• 3:59
  SPEAKER_01: Um, so e-Banks um was born here in Brazil, as I said, and currently we connect global companies uh with customers in emerging markets across Latin America, Africa, and Asia.
• 4:12
  SPEAKER_01: Um, and the problem that we solve is really straightforward.
• 4:15
  SPEAKER_01: So a company with a card first checkout, they cannot reach the majority of buyers in these markets simply because most of them don't have a credit card and never will.
• 4:26
  SPEAKER_01: That's really about access, accessing these consumers.
• 4:30
  SPEAKER_01: And what makes these markets really hard to serve today is that there is no single emerging market for starters, right?
• 4:37
  SPEAKER_01: You you must know that you lived in Africa.
• 4:39
  SPEAKER_01: This is completely different from what we have here in Brazil.
• 4:42
  SPEAKER_01: And when you look at payments, what works here in Brazil is not the same that works in Mexico.
• 4:48
  SPEAKER_01: What uh the preferred payment method in Indonesia is not the same uh that we have in Thailand.
• 4:55
  SPEAKER_01: So each market really has developed its own way uh for customers to trust, to pay, and the result is really a fragmented um ecosystem at every layer.
• 5:08
  SPEAKER_01: Uh so when e-banks started working here in Brazil, um, this gives us a strong foundation uh for understanding that complexity from inside.
• 5:19
  SPEAKER_01: So uh back in 2012, uh when we started uh the company, um we had uh only one payment method, so it was bolero.
• 5:29
  SPEAKER_01: It was the cash payment uh that is widely used by by Brazilians, uh, where you have to print like a you know a barcode and then you'll be scan it uh in ATM or through your mobile banking or online banking.
• 5:47
  SPEAKER_01: Um so and then we look now, you know, almost 14 years later, and we have PIX in Brazil, which is like one of the fastest growing digital payment methods in the world.
• 6:00
  SPEAKER_01: Uh it has 95% of penetration among adults, and it's an instant payment that is widely used for like every everything, like since buying online, uh paying for your bills.
• 6:12
  SPEAKER_01: So what we see here is that there is this very you know uh fast changing environment.
• 6:20
  SPEAKER_01: Um and each transition there uh taught us about uh you know this same underlying underlying dynamics.
• 6:30
  SPEAKER_01: So there's changes in payment methods, the regulatory framework, uh languages across the markets as well.
• 6:37
  SPEAKER_01: But the consumer uh behavior travels because these are mobile first consumers, middle class, outside the card system, often transaction transacting for online for the first time.
• 6:49
  SPEAKER_01: Um and and that's uh that's where we started really.
• 6:54
  SPEAKER_01: So uh understanding this complexity, nailing this complexity and and solving this uh through payments and gaining the consumer trust uh through through through that.
• 7:08
  SPEAKER_00: Wonderful, and again, it's it's indeed a big need, right?
• 7:11
  SPEAKER_00: Most of the world, as we all worked on together, uh the emerging world is in the non-conventional markets, and there's much, many more south-south connections.
• 7:20
  SPEAKER_00: You see it in airlines as well.
• 7:21
  SPEAKER_00: Many are doing well who connect Africa, Latin America, and Asia.
• 7:24
  SPEAKER_00: And I guess you are the equivalent on the payment scale.
• 7:27
  SPEAKER_00: Can you just walk through the users who don't know so much about e-banks yet?
• 7:32
  SPEAKER_00: Classic use cases.
• 7:33
  SPEAKER_00: You have you have gamers in one country that connect to somewhere else.
• 7:37
  SPEAKER_01: Yeah, sure.
• 7:38
  SPEAKER_01: Um so um we see uh maybe I I should take a step back before that and talk a little bit about the profile of this consumer.
• 7:49
  SPEAKER_01: So we can relate that to um to what is the what type of categories uh are growing.
• 7:57
  SPEAKER_01: Uh so what we see here today is that the consumer who is buying in emerging markets is really a young, middle to lower class uh mobile first that is uh buy online for the first time.
• 8:09
  SPEAKER_01: Uh if you look at you know what is driving e-commerce uh in most of these emerging markets, we're talking a lot a lot about um uh gaming, um online, online education, SaaS.
• 8:24
  SPEAKER_01: So these categories that are really connected to how people, to their their needs, you know, their day-to-day needs and how they are um working, uh traveling, uh having entertainment.
• 8:38
  SPEAKER_01: So these are the categories that stand out in emerging markets, especially in these nascent economies in sub-Saharan Africa, Southeast Asia, driven almost by uh entirely by young consumers.
• 8:51
  SPEAKER_01: Um we have some interesting uh industries growing a lot uh from our perspective here here at ABANC.
• 8:59
  SPEAKER_01: Social media, for example, is one of them.
• 9:01
  SPEAKER_01: It's an interesting case because it's an ecosystem that is evolving surprisingly quickly in terms of business models, uh, revenue streams.
• 9:09
  SPEAKER_01: So they have been experimenting with rewarding high-frequency users with micropayments.
• 9:15
  SPEAKER_01: Uh, they have you know B2B ads, digital ads related to their business model.
• 9:21
  SPEAKER_01: Uh, but they also now move into social commerce and also live streaming and everything.
• 9:26
  SPEAKER_01: So it's a hyperdynamic business with different behavior across regions, and this makes uh payment strategy even more complex.
• 9:34
  SPEAKER_01: We love it.
• 9:34
  SPEAKER_01: Uh, and then if you look at SaaS, you know, SaaS is a super relevant um uh business also that's growing in emerging markets because most of people uh that use this software are working, you know, are solo entrepreneurs, they're working from home, they need the digital tools to develop their work.
• 9:53
  SPEAKER_01: Uh so it's a hyper growing uh vertical uh in these markets.
• 9:58
  SPEAKER_01: And now we have you know AI-focused companies growing surprisingly fast, being global from day one, you know, so studying from day one in multiple countries across uh emerging markets, Africa, Latin America, Asia, so and also demanding another level from us of payment flexibility.
• 10:16
  SPEAKER_01: So I would say you know that across the board, uh say I see SaaS gaming, uh, social media online education, you know, uh as a very uh compelling uh business.
• 10:27
  SPEAKER_00: Can you give the uh the viewers an indication what what's next?
• 10:31
  SPEAKER_00: Is this 25 markets now?
• 10:33
  SPEAKER_01: Um or 25, I am correct.
• 10:37
  SPEAKER_00: Remember that number.
• 10:38
  SPEAKER_01: 25 and counting, you know, because we are always looking to the next uh the next opportunity, the next hyper-growing market.
• 10:46
  SPEAKER_01: So it's really exciting.
• 10:48
  SPEAKER_00: Uh well, I don't know.
• 10:49
  SPEAKER_00: I think during our the time we worked together, yeah.
• 10:52
  SPEAKER_00: I think you entered Egypt, uh, you entered a few other Asian markets.
• 10:55
  SPEAKER_00: Uh, I think you know, maybe you can cover the others.
• 10:58
  SPEAKER_00: Uh I don't want to anticipate things that might happen, but any other direction if kinds of your footprint, is it that momentum will continue, or there's a way to consolidate or deepen in the the markets you're at now?
• 11:11
  SPEAKER_01: Um, I think it's a dual strategy here.
• 11:14
  SPEAKER_01: Um, we always want to go uh deep and also broad.
• 11:19
  SPEAKER_01: So, of course, we want to bring the most uh uh the maximum number of opportunities to our clients, you know, looking at these markets that have the same consumer behavior, the same uh the same infrastructure need, you know, the the complexity for us to solve.
• 11:38
  SPEAKER_01: This is really what we we like to do.
• 11:40
  SPEAKER_01: Um, but also um developing the depth that has um that has also become our competitive mode, you know.
• 11:50
  SPEAKER_01: So uh we we know what are the preferred payment methods in each country.
• 11:56
  SPEAKER_01: We are directly connected to these payment players.
• 11:59
  SPEAKER_01: Uh we know what's the preferred uh UX, you know, the checkout flow, and what's the data that merchants need to collect from customers to ensure that they're gonna have that transaction approved, and what type of card brands they need to offer, and how to work with you know the acquirers, like the payment processors at the end of uh the network to ensure that that card is recognized like as a legitimate transaction, you know, that that consumer in the countryside of um Malaysia is actually uh buying a legitimate customer buying uh from a global company.
• 12:42
  SPEAKER_01: So um it's really about the the the two the two strategies of Afghan.
• 12:48
  SPEAKER_01: It's about uh looking at the next big opportunity for our merchants according to the consumer demand that they're already seeing, the market signals that we are tracking uh through World Data Lab data, through our other uh market intelligence, uh, and and going uh really deep into the consumer behavior and what we really convert them uh at the checkout.
• 13:16
  SPEAKER_00: Estelita, and I think the the viewers can sense this.
• 13:19
  SPEAKER_00: This is a very innovative uh enterprise, and you are spearheading the expansion of the global innovation, Estelita.
• 13:26
  SPEAKER_00: Um, give us a sense of how you see in the payment space uh the next wave of innovation.
• 13:32
  SPEAKER_00: What are the things you're seeing from emerging markets where most likely innovations happen, or at least in combination with um some of the Silicon Valley players?
• 13:40
  SPEAKER_00: What do you see innovation happening in your space in the next two years?
• 13:45
  SPEAKER_01: Um that's a very exciting moment to be working with payments, um, you know, when AI era and everything.
• 13:53
  SPEAKER_01: Um, but I we really wanted to stress today is that we see a lot of uh the most interesting innovation in payments for me is happening in emerging markets and it's moving towards two directions basically.
• 14:05
  SPEAKER_01: So the first I would say is the evolution of this instant payment rails beyond the original scope.
• 14:12
  SPEAKER_01: So when you see it, um when you look at PIX in Brazil, for instance, PIX launched as this instant payment method uh for you know one-time transactions, and now we have uh PIX automatico, which is PIX for recurring transactions.
• 14:29
  SPEAKER_01: So we have a lot of things evolving into that as well.
• 14:32
  SPEAKER_01: Uh in India we have UPI, you know, which is you know the actual inspiration for PIX, which is also an instant payment method that's currently used by most of the population.
• 14:44
  SPEAKER_01: And UPI has also evolved into um a recurring uh RAIO.
• 14:50
  SPEAKER_01: Uh and now uh it's super interesting, which is the second point that I want to bring, second point, which is the convergence between payment methods that uh most of people would treat as competitors.
• 15:04
  SPEAKER_01: So uh in India, as I was saying, today there is this um embedded UPI uh payments within repay cards.
• 15:14
  SPEAKER_01: So you can pay with a credit card, actually, you know, choose, oh, I'm gonna pay with this card, but the payment method is actually transacted through UPI Rails, which is super interesting.
• 15:25
  SPEAKER_01: You know, uh we also see, for example, when uh PIX emerged, there was this um feeling, oh, this is gonna kill with cards, you know, it's a super competition, etc.
• 15:37
  SPEAKER_01: But now we see like banks using the data that PIX brought, you know, in terms of uh consumer behavior to give like consumer credit, for example, because most people that were using PICs not necessarily were transacting like in official financial rails.
• 15:54
  SPEAKER_01: So now we have much more information about the actual consumer spending of Brazilians, and banks can use this to offer them new uh financial products, you know, or to offer as they already do like, oh, you can pay with PICs through your credit limit, and then I will give you, you know, discounted rates for that, etc.
• 16:15
  SPEAKER_01: So it really became an ecosystem, you know, what we saw in India, what we saw in in Brazil.
• 16:21
  SPEAKER_01: And to add one more case, we have MPESA also in Kenya, which is like the biggest mobile money network uh in the world.
• 16:29
  SPEAKER_01: It's a fantastic uh innovation uh where people could actually access their money through a mobile phone even without internet connection.
• 16:38
  SPEAKER_01: That was amazingly uh innovative uh back then.
• 16:43
  SPEAKER_01: And today MPESA is actually actually issuing uh virtual cards uh to their um uh card uh to their mobile phone holders.
• 16:52
  SPEAKER_01: So you can actually have MPESA issued card to buy online, for instance.
• 16:57
  SPEAKER_01: So it's really like a co-petition, you know.
• 17:01
  SPEAKER_01: We see that uh there is there's a bigger pie than we assume, you know.
• 17:06
  SPEAKER_01: So there is really space for everyone, and each one of the payment methods is tackling a different use case, a different consumer behavior, a different consumer segment, and we see all them like really feeding from each other and and you know evolving into this very hybrid and very exciting payment environment.
• 17:28
  SPEAKER_01: So um this is where I see innovation payments today.
• 17:33
  SPEAKER_00: Wow, this is super fascinating.
• 17:35
  SPEAKER_00: It's close to my heart, you know, the the cake can grow and payment is for the people.
• 17:40
  SPEAKER_00: That is two big takeaways for me.
• 17:42
  SPEAKER_00: Before we come to our concluding question, Estelita, I still want to build on what you just said because I find it really fascinating.
• 17:49
  SPEAKER_00: Uh so if I would organize the world in three blocks, right?
• 17:52
  SPEAKER_00: There is the very poor people that use cash, then there is these entry-level consumers that have it much easier now, unfortunately, to enter through MPES or enter your service, the space, and then you have the credit card folks.
• 18:05
  SPEAKER_00: But what you outlined is uh well, I hope that the cash is getting eaten away, but maybe you can comment on that.
• 18:11
  SPEAKER_00: But there is much more synergy that you're paving the way and could help the credit card players, that you're both you may be in competition, but you also may help them because you're getting the consumers ready for them.
• 18:22
  SPEAKER_00: Just walk us through again some of the elements you just touched on, because I think it's really fundamental to how the financial sector is operating now.
• 18:29
  SPEAKER_01: We see different um use cases for each payment method, which would you know make a same person use credit card for one type of purchase, cash for another type of purchase, and then um instant payment or A2A uh transfer, which is account-to-account transfer for another type of purchase.
• 18:49
  SPEAKER_01: We get that question a lot from customers like, oh, how many exclusive users I would have from that payment method that are not using any other payment method?
• 19:01
  SPEAKER_01: And the answer to most of these questions is like, we can't tell you, you know, because what we see is really this payment diversity even within one consumer.
• 19:12
  SPEAKER_01: So, for example, me, I sometimes pay with boleto, which is a cash voucher, with because you know it's um how I used to pay for you know uh electricity or for uh monthly um obligations.
• 19:27
  SPEAKER_01: So I know that I will print the boleto and I will remember, like it's it's gonna serve me as a reminder that by day 10 I need to pay that bill because it's every month that I pay, etc.
• 19:39
  SPEAKER_01: etc.
• 19:39
  SPEAKER_01: And now today we have, for example, uh PIX QR code within the boleto, so I can actually pay the boleto with PIX, which is another uh hybrid innovation that we're having, you know.
• 19:50
  SPEAKER_01: But but then I will pay with boleto, I can pay with um credit card for a recurring transaction, you know, for my streaming subscription, and I can also pay through PIX for uh online purchases that I'm doing, you know, that I want to get as fast as I can, and then PIX has instant confirmation and I'll pay, you know.
• 20:10
  SPEAKER_01: Uh so uh of course that we see uh instant payments uh and mobile wallets also in many, many, many countries, uh including a lot of consumers from these lower and middle classes that were previously excluded from the financial system.
• 20:26
  SPEAKER_01: We see these payment methods uh bringing a lot of uh consumers to the online uh commerce and to commerce itself.
• 20:34
  SPEAKER_01: Uh but the fascinating thing is that as people get more and more options, they will use different options according to the use case.
• 20:42
  SPEAKER_01: You know, so I will pay with instalments for this purchase, I will pay with my wallet for that, uh, I will pay with a cash voucher for that, and that's that's the complexity that we're trying to nail.
• 20:55
  SPEAKER_00: Fascinating, Estelita.
• 20:57
  SPEAKER_00: Got me a much better, even deeper sense of the space you're operating in and its innovation.
• 21:03
  SPEAKER_00: Um, as the viewers know, uh the final question is always about the uh favorite number of my guest and the story behind it.
• 21:12
  SPEAKER_00: So, Estelita, what is your favorite number?
• 21:15
  SPEAKER_01: First of all, this is a very uh nice question.
• 21:18
  SPEAKER_01: Uh, it got me thinking a lot about okay, what am I gonna say?
• 21:22
  SPEAKER_01: You know, I have uh so many numbers in my life.
• 21:25
  SPEAKER_01: Uh but you know, looking at uh what eBanks does and what we have learned about payments and inclusion and what they can uh provide to people, to companies, I would say that my favorite number is 95, which is 95% of Brazilian adults currently use FIX, which is super impressive.
• 21:47
  SPEAKER_01: If you look at a payment method that was launched less than six years ago, like five years ago mainly, uh in November 2020.
• 21:56
  SPEAKER_01: So it evolved from zero to near universal adoption in a country with 200 million people.
• 22:03
  SPEAKER_01: So that's very, very impressive.
• 22:05
  SPEAKER_01: No payment rail in industry has achieved that, and it tells a lot that uh about what happens when you design uh from where the customer really wants, you know, what they have and what they need.
• 22:19
  SPEAKER_01: So that's super exciting.
• 22:21
  SPEAKER_01: I will go with 95.
• 22:24
  SPEAKER_00: 95.
• 22:24
  SPEAKER_00: Wow, 95% of Brazilians who are eligible can who are transacting are using PIX.
• 22:30
  SPEAKER_01: They're actually using PICs.
• 22:33
  SPEAKER_00: Using PICs.
• 22:33
  SPEAKER_01: Yes.
• 22:34
  SPEAKER_00: Wow, uh well, well, congratulations to PICs and congratulations to the e-banks team for being associated with this and for growing so strongly.
• 22:42
  SPEAKER_00: Um, thank you so much, Estelita Haas, uh a leader in the global payment space of innovation, for talking so eloquently about payments uh is about people.
• 22:53
  SPEAKER_00: Thank you so much for being on the show, Estelita.
• 22:56
  SPEAKER_01: Welcome to Latina.
• 22:58
  SPEAKER_01: Thank you so much for the opportunity for.