Ricardo Sangion, partner at VC firm TheVentureCity and former country manager of Pinterest Brazil, is one of the Latin American tech pioneers who are looking into the most promising industries in the region.
Why has Brazil been so successful in digitizing instant payments in such a short amount of time?
By the time tech caught up with banking, the infrastructure in Brazil was solid enough so that big banks were able to have very well-developed software platforms built quickly. It was a matter of having government incentives, regulation, and tech investment from the big players to make it happen. At some point, when access to the internet exploded, the Brazilian government pressured all stakeholders to build a model like Pix, the country’s instant payment ecosystem created by the Brazilian central bank. The entire ecosystem was ready to help Pix grow — it was launched in November 2020, and about 55% of the population is now actively using it. Plus, the size of the Brazilian market was also helpful. When there are really big players that come along and are eager to participate, it’s easier for others to follow suit.
How has fintech’s success in Latin America helped other industries grow in the region?
Everything is related to fintech because we always need to pay for something, and that has increasingly turned into something digital. Fintech has, for example, paved the way for the growth of Software as a Service (SaaS) models. By facilitating payments and subscriptions, SaaS has spawned accounting services, paid monthly, that are both affordable and easy to use for small business owners. We’ve also seen a large number of new universities emerging with a SaaS model; therefore, more investment is being poured into that industry.
Decentralization is the next big thing for new business models, but what’s the likelihood of it taking hold in countries like Brazil or Mexico?
These two countries are already ahead when it comes to open banking systems — Brazil much more than Mexico, though. They’re not decentralized yet, but they’re slowly moving towards very collaborative environments. Pix, again, is a good example: it is centralized by the government, but plenty of people were invited to participate in the decision-making process. In Mexico, something similar happened with Clip. In 2012, it pioneered a digital payment platform that facilitates transactions through a smartphone, and then, the entire ecosystem started to change. The open banking phenomenon started replicating in other industries: open health ecosystems, where health-related data is shared among doctors, hospitals, and patients, or open delivery, which will allow users to choose between more than just one or two logistics players, for example.
