The financial segment plays a significantly important role in the modern world. Leonardo Baptista, CEO & Co-Founder at Pay4Fun Payment Services, shared his thoughts on the payment service, its future in iGaming, and how cash is vanishing from our lives.
Read an interview below to find more.
Could you briefly describe what is going on in the payments market these days? From your experience, which payment methods work the best for the iGaming industry?
Here in Brazil, we have one of the most advanced payment systems in the world, completely regulated, while the gaming industry is not. We are very optimistic about the regulatory law for this year, and we believe the new president, who started the position on January 1st, will look closely at this segment especially because of the Brazilian economy.
The legalization will bring many benefits for the country, such as integrity and transparency in the sport itself – avoiding manipulation of bets and also game results, generating new jobs for Brazilians, and warming the economy. As the law comes to define rules and norms, new companies in the sector should arrive here, aiming to operate legally.
For those concerned about possible regulation of the sector, they should definitely require their local payment method to follow the rules of the local market.
Digital payment methods are gaining popularity among people worldwide. However, there are still some complexities in the industry related to personal data, for example. What are the main challenges you as a payment service company CEO face?
Even with the advancement of payment methods, we still have some challenges to face. For example, in the processes of opening and validating accounts for our new users and clients, we need to automatize the KYC – Know your customer – processes.
Another point is the integration of tools for proof of life and address validation. The user has to have a bank account with the same name as its Pay4Fun account. We need to be careful about the first steps when the client wants to open an account with us and these two processes are very important and indispensable for our compliance.
How would you describe the Brazilian payment market? Do Brazilian customers actively use digital payment services?
First of all, yes. Here in Brazil, we are increasingly using digital payments and following all the new great options in the market. One of the most useful and successful payments we have is PIX: a new system created by the Brazilian Central Bank to bring instant payments to life and it has been serving as a successful case story to other emerging markets.
I remember when PIX was launched, in November 2020, it shook the whole payments industry. Now, we have over 71% of Brazilians using the new method and over 380 million registered PIX keys.
Do you see a complete replacement of traditional payment methods for digital ones? Namely, in the iGaming niche. Why?
I believe so. People are more and more open to new methods and technologies, not just because it is faster but safer. Hopefully, in the iGaming segment, users get comfortable enough with digital payments.
How to launch a payment service company from scratch? Is it possible? And what to start with?
Yes, it is possible but not so easy. We launched our service in 2018 and soon after came the Coronavirus at the beginning of 2020. Fortunately, we had massive growth during the pandemic: the number of gaming users increased, and many users opted to start gambling on the internet for entertainment.
Today, we have over 360 websites integrated, 800 thousand clients in our platform, and more than 100 employees working in this amazing team. For those who want to start, it is very important to have the industry knowledge and also partners that will help you along the way.
What sector is the most attractive for the digital payment service? In which market, there is a minimum amount of complexity?
I believe is most attractive for the retail and B2C segment. In 2021, Brazil registered more than 3.9 million enterprises formalized as micro and small companies or individual microentrepreneurs (MEIs) and the number is increasing. With the multiple services and financing options offered by the new fintech today, Brazilian entrepreneurs have many benefits and opportunities to start their own businesses. We have sectors that are upgrading the use of digital payments but we also have some others that need some improvement.
In what direction the global payment service will be developing over the next few years, in your view?
Payments are becoming increasingly cashless, and the industry’s role in including this change has become a priority. I truly believe that traditional payment providers will collaborate with fintech and technology providers as one of their main sources of innovation.
