What’s next for PayPal? 55 million unbanked Brazilians
When it comes to growing beyond its current user base, online payment facilitator PayPal has a clear strategy: make life easier for the “unbanked” around the world – that is, people without bank accounts. The unbanked are at a huge disadvantage regarding money, as there are a number of financial services that simply aren’t available to them. Worldwide, there could be as many as 2.5 billion people without bank accounts, according to the World Bank. PayPal is starting with the 55 million that live in Brazil.
PayPal’s share price has risen by 80% over the past year
SOURCE: Yahoo Finance
The company’s director general in Brazil, Paula Paschoal, says: “Companies such as PayPal have many responsibilities in the current financial scenario, since we represent a more democratic alternative than traditional banks. One of its key missions, across over 200 countries where it operates, is precisely this: democratizing financial services.”
It’s a noble – and lucrative – goal, but how will the company go about it? According to Paschoal, mobile is the key. She says that “mobile-first” services can be “more affordable, accessible and easier to use.” PayPal’s own research from March supports this decision: 80% of services in the country are now, apparently, purchased on smartphones.
Another strategy that the company is adopting is to become an “omni-present” payment provider in Brazil. Paschoal describes work PayPal is doing to achieve this goal as “relentless”. The company has fought off local competitors, entered partnerships with all of the country’s largest retailers and major airlines, as well as a number of transportation services (Uber, Cabify) and beauty and fashion Ecommerce companies.
PayPal will also work to deliver top-quality online security – an important differentiating factor in the Brazilian market that will become more meaningful as mobile commerce continues to grow in the country.
Speaking to this last point, Paschoal was unambiguous: “Security is part of PayPal’s DNA and that can be confirmed by our fraud tax, which varies between 0.28% and 0.32% These numbers are extremely low and are only possible due to the data intelligence used to identify fraud attempts in real time.”
PayPal is in a great position in Brazil, and has a clear strategy, so it is, perhaps, unsurprising that Paschoal is not worried by competition. She told reporters:
“With the entire industry focusing on disruption, it gets very competitive, which benefits consumers since they have more options to choose from. In general, we believe that competition is good for the companies and for the consumers – and we respect all our competitors. But I can guarantee that we are prepared to face the challenges the market offers us. One of the best aspects of being a part of this universe is seeing the future shaping up right in front of our eyes. And that can change anytime.”
Dominion holds PayPal in its Global Trends Ecommerce Fund.
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