PicPay’s U.S. IPO marks a shift toward credit-driven growth built on wallet data, underwriting discipline and deeper customer engagement.
Transcript
This is Monday Conversation, a PYMNTS podcast. Karen Webster sits down with the visionaries behind the trends for the stories shaping what's next in payments and commerce. In this episode, PYMNTS CEO Karen Webster sits down with PicPay's CEO, Eduardo Chedid, to discuss how PicPay's US IPO marks a shift towards creative-driven growth built on wallet data, underwriting discipline, and deeper customer engagement.
Karen Webster:Hey Eduardo, congratulations on a wonderful milestone. PicPay ran the bet, rang the bell at Nasdaq today. You've completed your first trade. How does it feel?
Eduardo Chedid:Oh great, great. We've been on this road for a while, and so it's really exciting to reach that milestone. We know it's just the beginning and lots to be done, but yeah, really good.
Karen Webster:Were you nervous that you wouldn't really hit the button in in time?
Eduardo Chedid:Well, I mean, at that time, uh lots of emotions uh flowing.
Karen Webster:Uh there's a lot of pressure to hit it just at the right time, though, you know? Because everybody's watching the pictures, the cameras are rolling. It's um it's great. Well, listen, congratulations. I love the ticker. Pick picks before picks, P-I-C-S, yeah, before P-I-X.
Eduardo Chedid:And as you know it, we kind of uh launched that in Brazil, right? So we were instant payments, uh, so picks before PICs existed.
Karen Webster:Well, let's start there for our conversation. I mean, PicPay has grown fast in a market in Brazil that is really one of the most innovative but yet competitive fintech markets in the world. I'm curious, Eduardo, as you think about your own journey, was there a particular decision or a hard choice that you made over the last 12 to 18 months that made the business fundamentally stronger and got you ready for what is the milestone that you achieve today?
Eduardo Chedid:Yeah, I think that well, a bit longer than that, but it was the end of 22, uh, when we actually decided to bring core products that we've uh we already distributed, uh like credit cards, loans, uh uh into our own balance sheet. So that's quite a relevant uh decision, a business model uh change. Uh but that was a pivotal moment. And since the second half of 23, uh we have those uh core products now on our own balance sheet, and this is what's actually uh driving uh lots of the growth that we've been uh getting in the past uh two years. And more than that, it also uh drives more engagement and creates more stickness. So that was one uh very important decision.
Karen Webster:Well, certainly because credit historically has been very expensive to get in Brazil, therefore it's not widely available. I mean, even the installment programs um became very punitive if you missed a payment. Um, so what you've done is, as you point out, a business model innovation, but you must have good technology to underwrite the risk associated with the expensive credit. So I'm sure you learned a lot along along that that journey too.
Eduardo Chedid:Yeah, I mean, uh I mean what's important is that we're building uh everything that we do on top of the wallet, and the digital wallet generates tons of information. Like we have 52 million cards on file. We have millions of bills that are actually uh paid through us. Uh 11% of all uh PIC transactions either begin or end at a PicPay account. So this is a really powerful data collection machine, um, which uh actually deepens our strength on uh underwriting. On top of that, we offer what we call the account aggregator. On average, a Brazilian has from five to six bank accounts, and we allow them to actually connect all of those accounts into the PicPay app so that you can basically manage not only the PigPay uh account, but all of those others. And once they connect that, uh I also uh get uh access to that information from the other accounts, and both combined allow me to much better underwrite.
Karen Webster:So you you get a complete picture of the consumer. I mean, it's almost like consumers have their own little treasury sweep accounts that they can move money between you you've got that visibility, and there's an incentive for them to do it because you can underwrite them better, you can offer more services more compatible priced.
Eduardo Chedid:That's a good part of the value proposition.
Karen Webster:So, why is it that you've been able to create the super app, which has all of these features beyond you know just core banking? I mean, the bill payment app, you mentioned you know, you can monitor parking tickets and let people know if they're um going to be a fine or going to be late with paying a fine. Why are you able to do that? And it's been so challenging for so many others with similar aspirations.
Eduardo Chedid:I think it it's really in pick pace DNA. So we started by uh um enabling instant transfers at no cost 24 by seven. Before that, uh, what was you needed to go through the banking system only during banking hours, it would cost you quite a lot, and then the money would actually uh reach the receiver 24 hours later. So when I say that, it uh what's the pick pay DNA is about identifying identifying broken journeys and fixing them through the best in class uh digital experience. This is true for uh instant payments, it was true for uh bill payments. Uh also the way we actually uh uh grant access to credit, which is progressively and gamified, so it's easier uh for the customer to actually start showing their behavior, and then we'll uh progressively uh increase their uh credit limits. So it's uh I'd say it's all about that DNA of identifying and fixing the broken journeys.
Karen Webster:There are a lot of broken journeys, though, in in uh you know, around the world in different scenarios. And I want to come back to is there something in particular about the environment in the market in Brazil that gave you more of a competitive leg up than might exist in other markets where yes, there are still a lot of broken journeys, but it's been much harder to convince people to do the kinds of things that you've been able to do with PicPay.
Eduardo Chedid:I think there are a few things. Uh one of them, uh, digitalization in Brazil is really high. 94% of people are digitized. That's that's that's incredible. And Brazilians uh have forever been early adopters, so that also makes it uh uh uh a positive environment. There's another thing, the central bank of Brazil has been very favorable on actually driving more competition, uh, which uh also uh helps it. And then I think that in our case uh it's people as well as a scalable uh uh uh tech stack, a platform that uh currently actually gives us the lowest cost to serve uh in the market. So um I think that uh it's a combination of many things, right?
Karen Webster:What are the banks learning from you?
Eduardo Chedid:Well, uh I'd say that uh our will uh to basically uh you know be courageous and and try to do things differently from what uh they've been done for the past uh decades. Uh if you look at our bill payment uh system, I mean uh everyone could have done it. Um but it it takes uh it takes really uh a lot of grit and uh will to to change things.
Karen Webster:Yes, it well and and to earn the trust of the consumer, right? Once you've earned the trust of the consumer and you're providing a a great product competitively priced, it's easy to continue to add more features and functions to that. So I think I think you know, congratulations to you for being able to do that. Let's go back to today and you know, all of the thrilling um emotions that come with um, you know, being a listed company, ringing the bell, having evaluation, executing the first trade. Um Wall Street now will assign metrics that basically um measure your performance against what is considered Wall Street acceptable standards. However, are there things that you're going to be watching internally that matter more to you and the business than what may be reported every 90 days to the street?
Eduardo Chedid:Yeah, I think that uh definitely. I mean, in the end of the day, customer satisfaction is key. Uh the other thing that is uh fundamental in our uh uh history and which uh is the primary driver for uh both uh margin expansion and uh also revenue uh growth is uh further penetrating our user user base uh with credit products. Uh so this is uh a metric that we follow every day and uh is vital because it it multiplies into many different uh uh consequences, and that will actually uh allow us to deliver on what we're promising.
Karen Webster:What are some of the things that go into customer satisfaction? I mean, I know we we talk about customer satisfaction and a great experience, but what specifically does that mean to you and the pick pay customer?
Eduardo Chedid:And we do that actually on a product-by-product uh uh uh base. Because in the end, uh if we just ask, hey, I are you satisfied with uh PicPay, uh we feel that we need to fight for uh a really high satisfaction on each of the relevant products for the for the client. So we're not happy if the overall satisfaction is okay, uh, if one of the relevant products uh is not doing well. Um so I think that we are kind of paranoid paranoic about this healthy healthy paranoia. Uh yeah, uh it's about getting all of the products right and not only being uh happy because the overall satisfaction is uh is where it should be.
Karen Webster:I want to I want to ask a question of you. So when you joined Pig Pay, it was already about a decade into its its journey. So you came into an established company, you're not its founder, um, but but going into a business that was founder-led and and transitioned to an operator to obviously move the business to where it uh it is today. What was the hardest challenge you faced in stepping into a company you didn't start, navigating what you really needed to change and what you felt needed to stay just exactly the way it was?
Eduardo Chedid:It's always a challenge, right? At the same time, uh I was lucky to have uh a founder that um really welcomed me and uh made me feel like uh empowered to uh do all the changing. So uh Anderson Shamon, um I mean it's an amazing person uh that uh is still there with us and helping us uh every day, and that was a really facilitator for for all of that. Now apart from that, I would say that it's just a uh a change of mindset, which is the more challenging thing. Right. So at that time, if you look at uh basically all fintechs around the globe, uh it was all about growth, growth, growth of uh customers and engagement, and so we needed to also make it sustainable.
Karen Webster:Yeah, uh make money, driving.
Eduardo Chedid:Yeah, coming up with metrics like hey, now we need to look at revenues, now we need to look at uh net income. Uh it's always a challenge and in a process. But uh, I mean look where look where uh it got us. So it's uh it's I mean it's amazing.
Karen Webster:Well, there's always tough, tough choices, right? Um, but you have to have your North Star. And you talk about the customer experience, the customer satisfaction at the product level, which is important, but across the across the experience too, because you know sometimes products support each other, and it's really the end-to-end experience that matters a lot to people, but also having the courage to make those tough calls. And um, you know, that's uh that's what CEOs do day in and day out. It feels like 24-7, 365. Um, I know you have so many other um obligations. So I'll just ask this one final question. If you could sum up today in a word, what would that word be?
Eduardo Chedid:It's a new start. That's two words. Okay, so it's uh I'm just kidding. I'm just kidding. I'm just kidding.
Karen Webster:No, it's um it's it's sort of the the the second chapter or the third chapter of PigPay. And um, we're thrilled for you. Congratulations on such an amazing accomplishment. We look forward to staying in touch as you take this next step in your journey. Thanks for your time.
Eduardo Chidid:Really, really good talking to you. The special day for us.
Karen Webster:Thank you so much. Bye-bye now.
Eduardo Chidid:Bye-bye.
Narrator:That's it for this episode of the PYMNTS Podcast: The Thinking Behind the Doing. Conversations with the leaders transforming payments, commerce, and the digital economy. Be sure to follow us on Spotify and Apple Podcasts. You can also catch every episode at PYMNTS.com/podcasts. Thanks for listening.