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Brazilian Ebanx targets India and its huge payments sector

Bloomberg — Brazilian payments company Ebanx, which operates in 16 countries in Latin America and Africa, will start doing business in India at the end of the year as part of its global expansion into developing countries.

Ebanx, which has Advent International y FTV Capital among its investors, will soon allow merchants worldwide to process payments through its platform, including India’s burgeoning Unified Payments Interface, in one of its biggest bets on major emerging markets.

“The core of our vision is to expand into new markets — we call them emerging markets — and connect them to global trade,” CEO and co-founder Joao del Valle said in an interview. “Our merchants from the US, Europe and China have demand from India, they have business there and they need support.”

Since its founding in 2012, Curitiba-based Ebanx has focused on cross-border transactions for clients such as Spotify Technology SA, Airbnb and Alibaba Group, among others. It has become one of the main players in the platform for instant payments controlled by Brazil’s central bank, known as PIX, which is now used more than credit cards in Latin America’s largest economy.

Expansion into India gives the company presence in a country where 22% of the population of almost 1.4 billion people currently using the UPI platform, according to Ebanx. UPI will process around 1 billion transactions per day by the end of the year.

Ebanx’s goal is to give merchants the flexibility to process payments using the methods their consumers prefer through a single platform, according to Paula Bellizia, global head of payments.

“When we talk about emerging markets, we’re talking about all types of payment methods that consumers prefer,” he said.

The executives declined to comment on which multinational dealers will sign on initially, as well as who will lead the India operation and the size of the team that will be based in Mumbai.

Founded by a trio of Brazilians with legal, financial and technological backgrounds, Ebanx focuses on payments in areas such as e-commerce, gaming, streaming, digital advertising and online travel bookings for companies such as Sony, Uber, SheIny Shopee, among others.

It does not disclose the amount of annual payments processed. In 2022, the number increased 44% compared to the previous year, according to the company. Already in 2020, it had a payment volume of USD 3.5 billion through 150 million transactions.

In 2021, Advent invested USD 430 million in the startup for a minority stake, including funds to assist with an initial public offering in the United States. A confidential filing from its stock market debut late this year pegged the company’s valuation at about $10 billion, according to people familiar with the matter. Ebanx postponed its IPO last year.

Market debut

According to Del Valle, there is so far no question of reactivating that plan, “but it is undoubtedly a milestone to consider” for a period of between one and three years.

Over the past 18 months, as the technology sector has suffered headwinds, Ebanx has tightened its belt, abandoned some projects and reduced its workforce from 1,300 to 800 employees, according to Del Valle. The investments come from their normal working capital and they have not approached new investors or taken on debt, he explained.

Co-founders Alphonse Voigt and Wagner Ruiz have stepped down from their leadership roles and are now president and board member, respectively.

Last year, the payments firm ventured beyond Latin America with expansion into South Africa, Kenya and Nigeria, while hiring Wiza Jalakasi as head of Africa. The company is expanding to eight other countries.

“Credit cards are not very relevant there, penetration is very low except in one or two countries, so alternative payment methods, especially mobile, are a necessity,” Del Valle said. “Since European or American merchants are used to credit cards when traveling to these countries, they need a partner that allows 90% of the population to pay.”

Talent hiring

In the domestic Latin American market, Brazil remains the gateway for global merchants, including Chinese retailers, and Mexico continues to see good growth, including a partnership with FEMSA on its Oxxo stores. Argentina has been “unstable” given the economy, Del Valle said.

The company has also invested in top talent to fill senior positions. Bellizia was hired as global head of payments last year after holding marketing roles at Google. The company recently hired Valerio Zarro from iFood as vice president of governance, risk and compliance, Fabio Scopeta from Microsoft as chief technology officer and Melissa Cherrey Johnson from PayPal as vice president of business success for the Americas and Europe.

“To say that Ebanx is going global seems timid to me compared to our current presence,” says Bellizia. “We have been global and we are strengthening our global position.”

More at Bloomberg.com

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