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Brazil’s Olist Expands Banking Services for Retailer Clients

Brazilian eCommerce company Olist is expanding its banking services.

Founder and CEO Tiago Dalvi told Bloomberg News on Wednesday (May 29) that the company expects to process almost 15% of its yearly transactions through its in-house banking service by the end of 2024.

“After sales, the biggest challenge for our clients is access to financial services,” Dalvi said. “Without it they can’t grow their business. Retail players and banks don’t communicate well. It’s totally disconnected.”

According to the report, Olist’s customers are mostly small to medium-sized businesses (SMBs) with the bulk of sales still carried out through physical transactions. Although the pandemic helped trigger a boom in Brazil’s eCommerce sector, it still only accounts for about 12% of total sales. Olist is looking to process payments and invoices while rolling out tap-to-pay technology on its app, the report said.

Bloomberg notes that Olist recorded 30 billion reais ($5.8 billion) worth of transactions in 2023 and anticipates it will process about 4 billion reais worth of payments internally by the end of the year. The company soft-launched the financial services late last year and has about 1,000 clients using them.

The news comes at a time when smaller retailers that make most of their sales through brick-and-mortar transactions are the most at risk of closing, compared to those that leverage an omnichannel strategy or that rely chiefly on eCommerce channels.

That’s according to PYMNTS Intelligence research from the study “Main Street SMBs’ Revenues Grow Faster than GDP.”

That report showed that 9% of firms that sell predominantly in physical stores are at risk of closing, compared to 7% of those that rely on eCommerce and less than 5% of those that have a roughly even split between digital and brick-and-mortar channels.

As Alex Burgin, vice president of Authorize.net, said in an interview with PYMNTS’ Karen Webster, businesses of all sizes need websites that are simple, clean and easy to navigate, with simple, intuitive shopping carts.

“Whether it’s a lemonade stand on the side of the road, or a complex PC computer company, every business needs to accept payments,” Burgin said. “And at the core, every business needs to think about what their digital presence looks like and how they interact with their clients.”

Consumers tend to up their spending when shopping via digital channels. A PYMNTS Intelligence survey of close to 2,700 U.S. consumers showed that the average money spent per online purchase is $127, while in-store purchases come to $87.

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