Digital acquisition: the opportunity to massify payments at small retailers

Adoption of e-wallets continues to grow, but to connect the entire financial ecosystem it is necessary to move forward with digital payments for local businesses By Marcelo Fondacaro, Chief Commercial Officer, Veritran While the use of electronic wallets continues to grow and their acceptance is increasing, giving rise to alternative payments, the next challenge for the financial system is to advance in digital acquisition, so that the virtual money in the pockets of the users is accepted in any business, but specifically in those known as local businesses. Payments are going digital, but to achieve massification effectively, the ends of the ecosystem must be linked, which remain disconnected now. If a user uses a QR payment with his wallet to pay for a service to the holder of another wallet, say, for a home repair, he is already acting as a cycle initiator. It is precisely in this gap where there is an opportunity for banks or fintechs to give a boost to digital and mobile acquisition for small businesses and enterprises. Although cash is still preferred by businesses, considering it to be a lower-cost and more efficient method because it allows them to avoid paying commissions and renting electronic terminals, there is an opening for fast, secure, and convenient collection options. And this is where digital acquisition becomes an option for this sector, meaning the set of tools that a small business must enable digital payments, in-person with QR code, or remotely as with payment links, among other means. These mobile transactions help businesses scale, break down delay barriers to funding, reduce excessive transaction fees, and achieve higher sales. Digital payment collection also offers improvements in profitability and growth. Thanks to the optimization of the customer experience, it reduces costs by not using paper transactions, allows better transaction tracking, and -in the medium or long term- provides competitive capabilities, opening doors to expansion.

GREATER TRUST

As the uncertainty of the pandemic subsides, we see digital payments having a long-lasting effect among users while encouraging millions of new customers to switch to financial services for the first time, according to World Bank data. The agency estimates that 11% of adults in Latin America and the Caribbean (approximately 50 million people) used digital payments in stores during the first year of the pandemic, and the percentage of new adopters ranges from 15% of adults in Argentina and Costa Rica to about half in El Salvador and Jamaica. As a result, we see how users are relying more on the use of mobile devices for their financial transactions. Considering this, electronic payment processors are starting to implement options for start-ups and small businesses through applications with payment links, card, and/or QR codes. That said, any smartphone payment solution must also be accompanied by an optimal, simple, and attractive user interface, as well as top-level security and functionality mechanisms. At the end of the day, the true value of digital payment goes beyond a cost-benefit analysis. It is a gateway to a deeper and closer relationship with the customer. The technology to complete the digital payments cycle already exists and is available to financial players. Users are also demanding it and businesses are beginning to see its value. So, it will be very interesting to see how this ecosystem will take shape in the near future, and change the way we spend and move our money, which becomes more and more digital each day.