Fintech SumUp applies to Central Bank to become an acquirer in Brasil

September 3, 2021
Personal Finance Journalist
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https://medium.com/
The request must be completed within 12 months, but the expectation is that the entire process will be completed in a shorter period, judging by the authorization of the SCD (Society of Direct Credit), last year.

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When it announced, in March, a contribution of 750 million euros, the European payment fintech SumUp made clear its ambitious strategy for Brazil. So much so that up to 30% (or 225 million euros, equivalent to R$ 1.3 billion, at the exchange rate at the time) of this amount will be earmarked for investments in the operation that the company maintains in the country, where it arrived in 2013.

Now, fintech is getting ready to ‘play a bigger game,” says Mariana Lazaro, SumUp's CFO for Latin America. A few weeks ago, SumUp filed an official request with the Central Bank (BC) to become an IP (Payment Institution), reveals the executive exclusively to Finsiders.

According to Mariana, the guarantee for the SCD license — which allowed the company to create its SumUp Bank digital bank — was received in less than six months. "Which makes us optimistic for the IP license to arrive before the deadline."

The 'bigger game' Mariana refers to it because SumUp operates as a sub-acquirer, a figure that today has more than 250 players. With the IP license, it would act as a full acquirer, a sector that includes more than 25 companies, but whose market share is still dominated by Cielo and Rede, despite the rapid advance of names such as Stone, PagSeguro and Mercado Pago.

“The market is competitive, but it is not a player who wins everything. SumUp entered Brazil with great success, and today we are the second largest player, after PagSeguro, which serves the nano-entrepreneur”, emphasizes Mariana. Despite the countless discussions about fees, the inefficiency of the “two mammoths”, Cielo and Rede, made room for new entrants, says the executive.

Since its arrival in Brazil in 2013, SumUp has constantly invested in business in the country to expand its range of solutions for what it has been calling nanoentrepreneurs, who are basically self-employed professionals with an average income of BRL 1.6 thousand per month. They are merchants, solo service providers, such as hairdressers, a profile that represents 80% to 90% of SumUp's customer base.

Most (70%) of the public is outside the big cities, with concentration in the North and Northeast regions, cites Mariana. Most of them are clients by CPF, not CNPJ. “We still haven't reached the MEI [individual microentrepreneur],” she says.

SumUp's strategy to gain market share is to go beyond offering payments, such as the card machine, and add new products and services, such as a payment link and microcredit, in a 'one-stop shop' model.

“The intention is for the nanoentrepreneur to have a place to meet various needs”, says Mariana.

An example of this is the solution for anticipating receivables from any machine, launched as soon as Central Bank Circular No. 3,952 came into effect on June 7 (a market that has been explored by other fintechs, see cases of Marvin and TruePay) .

In addition to the portfolio of products and services — which has been growing as it is in other countries where SumUp operates —, the executive points out “transparency in pricing” and customer service as differentials. “There's something we don't talk about much, and which I consider strong, is the fact that we have support, our own call center”, says Mariana. And detail: all leaders need to work for a week in customer support to feel the footprint of the area, she says.

Founded in 2012, SumUp is present in 34 countries, and arrived in Brazil the following year, today one of the company's five largest operations in the world. In May, two months after the announcement of the new investment, fintech concluded raising R$300 million for its first FIDC (Receivables Investment Fund), in an offer coordinated by XP Investimentos and BV bank. The fund is managed by Banco Genial.

Last year, the company was also chosen in a BNDES public call for credit funds for micro, small and medium-sized companies (MPME).

Las opiniones compartidas y expresadas por los analistas son libres e independientes, y de ellas son responsables sus autores. No reflejan ni comprometen el pensamiento u opinión de Latam Fintech Hub, por lo cual no pueden ser interpretadas como recomendaciones emitidas por la platafomra. Esta plataforma es un espacio abierto para promover la diversidad de puntos de vista sobre el ecosistema Fintech.

When it announced, in March, a contribution of 750 million euros, the European payment fintech SumUp made clear its ambitious strategy for Brazil. So much so that up to 30% (or 225 million euros, equivalent to R$ 1.3 billion, at the exchange rate at the time) of this amount will be earmarked for investments in the operation that the company maintains in the country, where it arrived in 2013.

Now, fintech is getting ready to ‘play a bigger game,” says Mariana Lazaro, SumUp's CFO for Latin America. A few weeks ago, SumUp filed an official request with the Central Bank (BC) to become an IP (Payment Institution), reveals the executive exclusively to Finsiders.

According to Mariana, the guarantee for the SCD license — which allowed the company to create its SumUp Bank digital bank — was received in less than six months. "Which makes us optimistic for the IP license to arrive before the deadline."

The 'bigger game' Mariana refers to it because SumUp operates as a sub-acquirer, a figure that today has more than 250 players. With the IP license, it would act as a full acquirer, a sector that includes more than 25 companies, but whose market share is still dominated by Cielo and Rede, despite the rapid advance of names such as Stone, PagSeguro and Mercado Pago.

“The market is competitive, but it is not a player who wins everything. SumUp entered Brazil with great success, and today we are the second largest player, after PagSeguro, which serves the nano-entrepreneur”, emphasizes Mariana. Despite the countless discussions about fees, the inefficiency of the “two mammoths”, Cielo and Rede, made room for new entrants, says the executive.

Since its arrival in Brazil in 2013, SumUp has constantly invested in business in the country to expand its range of solutions for what it has been calling nanoentrepreneurs, who are basically self-employed professionals with an average income of BRL 1.6 thousand per month. They are merchants, solo service providers, such as hairdressers, a profile that represents 80% to 90% of SumUp's customer base.

Most (70%) of the public is outside the big cities, with concentration in the North and Northeast regions, cites Mariana. Most of them are clients by CPF, not CNPJ. “We still haven't reached the MEI [individual microentrepreneur],” she says.

SumUp's strategy to gain market share is to go beyond offering payments, such as the card machine, and add new products and services, such as a payment link and microcredit, in a 'one-stop shop' model.

“The intention is for the nanoentrepreneur to have a place to meet various needs”, says Mariana.

An example of this is the solution for anticipating receivables from any machine, launched as soon as Central Bank Circular No. 3,952 came into effect on June 7 (a market that has been explored by other fintechs, see cases of Marvin and TruePay) .

In addition to the portfolio of products and services — which has been growing as it is in other countries where SumUp operates —, the executive points out “transparency in pricing” and customer service as differentials. “There's something we don't talk about much, and which I consider strong, is the fact that we have support, our own call center”, says Mariana. And detail: all leaders need to work for a week in customer support to feel the footprint of the area, she says.

Founded in 2012, SumUp is present in 34 countries, and arrived in Brazil the following year, today one of the company's five largest operations in the world. In May, two months after the announcement of the new investment, fintech concluded raising R$300 million for its first FIDC (Receivables Investment Fund), in an offer coordinated by XP Investimentos and BV bank. The fund is managed by Banco Genial.

Last year, the company was also chosen in a BNDES public call for credit funds for micro, small and medium-sized companies (MPME).

Las opiniones compartidas y expresadas por los analistas son libres e independientes, y solamente sus autores son responsables de ellas. No reflejan ni comprometen el pensamiento o la opinión del equipo de Latam Fintech Hub y, por lo tanto, no pueden interpretarse como recomendaciones emitidas por la plataforma. Esta plataforma es un espacio abierto para promover la diversidad de puntos de vista en el ecosistema Fintech.
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