Em Conversa: Integrating Regional Payments With Yuno

As of April 2023, there were 1,000 active fintechs in Latin America (LatAm) with a vast majority focusing on financial inclusion, tackling the issue of 70 per cent of the population not having access to formal financial services. Em Conversa looks to uncover what the future of fintech could look like in the region, following a $2.1billion valuation in 2022.

In Brazil, almost two-thirds of the population trusts fintechs (57 per cent) as many have addressed the traditional problems faced by the country, like access to finance. However, more can still be done. Explaining how payments can be further digitised and democratised, we sat down with Juan Pablo Ortega, co-founder and CEO of Yuno.

Can you tell me more about the company and your role within it?

I am the co-founder and CEO of Yuno, a global payment orchestrator on a mission to democratise financial transactions by helping companies navigate the complex payment landscape across geographies more easily.

Our platform aggregates over 300 different payment methods worldwide, enabling companies to easily select and integrate those most relevant to them in just a few clicks and manage them in a single, easy-to-use interface. We also provide anti-fraud tools, smart routing, and one-click checkout, which helps companies save time, reduce costs, and gain the ability to focus on their core business.

Our unique smart routing system is an essential feature because it enables us to improve companies’ payment approval rates greatly. It automatically reroutes unsuccessful payments through a new payment pathway, using AI to optimise for those with the highest approval rating, lowest costs, and best user experience.

Founded in Bogota, Colombia, Yuno now operates across 60 countries to serve a global client base, including McDonald’s, Avianca, inDrive, and other companies operating in the hospitality, retail, mobility, and other sectors.

What are some payment trends we’re seeing in Brazil?

Brazil is a hugely exciting market that has seen enormous change in recent years. We are proud to be at the forefront of the country’s exciting and transformative digital payments revolution, helping simplify and democratise payment transactions for companies of all sizes.

Brazil’s digitisation and economic diversification has accelerated the expansion of a burgeoning middle class and fueled a shift from cash-based transactions to digital payments, helping foster a thriving e-commerce ecosystem. As many as two-thirds of Brazilians are expected to shop online by 2027, driving the e-commerce market to an estimated value of $125.68billion by 2029.

Digital financial services, including mobile wallets and neobanks, are revolutionising payment habits, particularly among the unbanked population, while initiatives like the BR code (the local QR code standardising payment initiation) and open banking are enhancing payment security and privacy.

The introduction of Pix in 2020, managed by the Central Bank of Brazil to provide instant settlements and zero transaction fees for peer-to-peer transfers, has significantly impacted the payments landscape. Pix, one of the payment methods supported by Yuno, now surpasses credit and debit cards as the preferred payment method in the country, with approximately 80 per cent of Brazilian adults using it in their day-to-day lives.

Other alternative payment methods such as Nupay, developed by Nubank for international purchases, and digital wallets such as PicPay have similarly grown in popularity.

What is Yuno doing to improve the payments sector in Brazil and LatAm?

We’re working to support this thriving ecosystem by enabling companies to integrate a wide variety of regional payment methods more easily without having to have huge numbers of IT and payments experts on staff. In doing so, we hope to support financial inclusion by helping businesses of all sizes cater to customer preferences while allowing them to focus on managing and growing their own core businesses.

As digital payments expand their reach and popularity and cross-border transactions become more frequent, efficient and smart orchestration will become increasingly vital. It ensures that every payment option is represented, even as merchants benefit from lower costs of running their businesses and greater reliability and security of their payment transactions.

How does the Brazilian payments sector compare to that of the rest of the world?

The Brazilian payments sector is one of the world’s fastest-growing and most technologically advanced. The introduction of the Pix instant payments system has been a major driver of this progress, playing a pivotal role in the financial inclusion of millions of Brazilians and racking up more than 160 million users since its launch just three years ago.

This success is now drawing attention in Latin America and further afield. Brazil’s central bank is now considering agreements to connect Pix with platforms in other geographies, with Italy being the most recent country to show interest in a bilateral agreement.

Looking at the tech ecosystem in Brazil more generally, the Central Bank has adopted regulations that, in most cases, make it easier for fintechs to operate, fuelling innovation. The country is now home to the highest number of fintechs of all Latin American countries, with several home-grown startups such as Nubank, Stone and PagSeguro having gained unicorn status, and 57 per cent of Brazilians expressing trust in fintech in 2023.

What are some unique challenges associated with the region/country in the payments space?

Historically, navigating the regional payments ecosystem has been incredibly challenging and costly for businesses of all sizes. Companies looking to optimise their payment procedures, introduce anti-fraud tools, and reduce transaction costs have had to approach multiple service providers individually, sucking up valuable employee time.

At Yuno, we have sought to solve these inefficiencies by creating a single, user-friendly platform through which companies can manage and optimise all of their payments in one place and ensure that transactions are secure.

Zooming in on more specific pain points, fraud has been a particular challenge in the Brazilian – and regional – payments sector. Total fraud in Brazilian retail is expected to exceed R$87billion by 2024, an increase of 13 per cent compared to 2023, with forecasts suggesting this number may exceed R$99billion by 2025. To confront this head-on, we’ve embedded robust anti-fraud mechanisms into our platform, empowering companies to confidently conduct transactions, given this heightened security.

Access to consumer lending, while having improved, is another challenge. Although 58 per cent of Latin Americans possess a credit card, only 30 per cent have access to other forms of credit, such as loans, insurance, or investment products. Steps are being taken to address this issue, but there is still considerable potential for further innovation to enhance access to credit and stimulate regional consumption.

Plans for the future (roadmap and growth plan)

Our current focus is on serving our customers well, as we expand our reach in Europe, Asia and Africa. We see huge potential in these regions and great scope for Yuno to help companies more easily navigate the local payments ecosystems there as we have done across Latin America.

Most recently, we have announced our launch in Singapore, Hong Kong, Thailand and the Philippines, as well as our appointment of Jonathan Hall as Yuno’s head of APAC to oversee our regional expansion. Hall brings with him a wealth of experience from his previous roles at Rapyd, PayPal, and Hyperwallet, which we are excited to leverage as we work to bring Yuno to more customers.