All signs point to Brazil being back on track as a digital economy leader, marked by steady increases in digital payment innovation.
PYMNTS’ Q3 2022 ConnectedEconomy™ Index, “How the World Does Digital,” measured how more than 30,000 consumers across 11 countries incorporated digital tools, transactions and other activities within their daily lives. This globally focused edition of the index noted that during the third quarter of last year, broad day-to-day use overall rose for routine activities compared to more one-off endeavors, such as booking travel. Steady growth in daily activities such as messaging, marketplace purchases and online banking indicated sustainable future growth for consumers’ digital transformation globally.
Brazil’s digital engagement was an exception from the index’s overall trajectory for the quarter in that it decreased, dropping the country from second place in digital transformation to fourth. This represents the steepest decline among the countries the ConnectedEconomy™ Index tracks.
However, a deeper look at the data revealed that this contraction may not be as big of a deal as it first seemed. After all, Brazil’s combined digital reach, measured as number of different daily, weekly and monthly digital activities engaged in by frequency, remains highest among the countries tracked, earning a reach score of 17.9. Of note is the reality that Brazil leads all nations we studied in daily engagement, suggesting that everyday interaction with the ConnectedEconomy™ is particularly strong there.
Brazil’s digital engagement dip in Q3 2022 may have been temporary. One reason is that the country was mired in a contentious general election campaign during the quarter. Not knowing which way the country would be headed may have caused some economic uncertainty, and therefore market volatility, until the election results were finalized.
As Brazil moves on politically, there are already signals that the country and its FinTech sector are already picking digital transformation back up as significant players return to the Latin American hub. Equifax is expanding its reach in Brazil through the December acquisition of a major local competitor. Earlier this month, Accenture announced it had acquired a Brazil-based cybersecurity firm in order to launch a cyberindustry presence in the region. This follows the trend of major investments pre-campaign cycle, such as Google’s $1.2 billion investment the previous June.
Efforts are also underway to boost financial inclusion to underbanked populations within Brazil. PayU, a single platform enabling cross-border commerce and payments functionality through a single integration, has seen growth in the country. Pix, an instant payment system launched in 2020 by the Central Bank of Brazil, is now used by 70% of the country’s consumers.
With the election settled and the country moving forward, there’s cause to believe Brazil’s digital transformation may well be back on track.
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