Developments in the payments industry accelerate financial inclusion

Fintechs have played a significant role in promoting financial inclusion, with opportunities for millions of people around the world. As technology continues to advance and fintechs expand, there is a proportional increase in access to financial services for those who were previously on the margins of the traditional banking system.

"Every time you see a benefit created with a machine in a commercial establishment, it benefits both the establishment and the end consumer," says Antonio Carlos Freixo Junior, Mineiro, founder and CEO of Grupo Entre, whose companies include EntrePay, a developer of solutions for companies to use their own card machines.

Fintechs combine technology and finance to offer additional solutions to those of the traditional banking system, such as those listed below:

Access in unbanked regions - Fintechs enable people in rural or remote areas to access bank accounts, money transfers, loans and investments via mobile apps and online platforms. This is especially important in locations where traditional bank branches are scarce.

Microfinance and P2P loans - Fintechs facilitate microfinance, allowing small entrepreneurs and individuals to access low-value loans. In addition, P2P (person-to-person) platforms connect borrowers directly to investors, making loans more accessible.

Inclusion for the unbanked - Many people do not have access to traditional banking services due to lack of documentation or geographical location. Fintechs overcome these barriers with solutions such as digital identification and electronic wallets, allowing these populations to participate in the formal economy.

Mineiro, from Grupo Entre, gives a concrete example of the importance of these companies in building a more inclusive and accessible financial system for everyone: "Pix has replaced ATMs. One of the big concerns, especially in the countryside, is transporting money. When withdrawals are democratized, and they stay in the commercial establishment, this whole flow of money is relieved, and it goes straight to the bank. And the commercial establishment gets paid for it".

EntrePay is an acquiring company focused on the B2B (business to business) market. It enables other companies, usually banks and franchise chains, to act as sub-acquirers in the means of payment market, with their own branded card machines. The concept is known as white label. The company also offers TEF (Electronic Funds Transfer) and POS (Point of Sale) systems, as well as e-commerce solutions.

One of EntrePay's main differentiators is its business model, based not only on charging fees per transaction, but also on selling numerous product solutions through the card machines. This gives end customers a new source of income, rather than just another expense.

It is also the owner of a technology that allows sales to be charged to the machines via the telephone network. It operates with an exclusive focus on the B2B market, with no conflict of interest with partner sub-acquirers in the search for the end customer.

Geographically, EntrePay is concentrating its efforts on the huge market made up of cities in the interior and peripheral regions of Brazil, which are rich and dynamic, but today are left in the background by major competitors. This is where the group believes it can best fulfill its mission of democratizing access to technology and financial services and making it easier to do business.

According to Joelson Sampaio, professor at the Getúlio Vargas Foundation's São Paulo School of Economics (FGV EESP), by democratizing access to banking services and promoting a more agile and secure economic ecosystem, technological innovations in Brazil's payments sector have the potential to mitigate income inequality.

"By integrating more Brazilians into the formal financial system, facilitating entrepreneurship and stimulating competitiveness and economic efficiency, these innovations not only transform the country's financial landscape, but also offer a powerful tool for building a more equitable and prosperous society," says Sampaio.

For the FGV professor, comparatively, many countries still rely on slower or more expensive payment systems, limiting economic agility and financial inclusion. "The Brazilian experience serves as an innovative model, demonstrating the significant benefits of modern payment systems for society as a whole."

_{Photo by Ivan Samkov}