Five Million Colombian SMBs Are Ready to ‘Go Digital’ Amid Exploding Demand for BNPL

One byproduct of the great digital shift, especially in emerging markets, has been financial inclusion.

Mario Shiliashki, CEO of PayU Global Payments, told PYMNTS’ Karen Webster in a recent interview that Latin America stands out as a key market for eCommerce and digital payments growth.

“More than 60% of these 5 million small businesses in Colombia have inadequate or no real access to financial services,” Shiliashki said.

These firms tend to be an afterthought within the banking system. Access to capital, to real innovation and even to effective cash management is still lagging behind what is seen elsewhere around the globe.

“Colombia and Latin America still have a way to go in terms of digital adoption — and in digital payments adoption, in particular,” he said. That’s partly due to the fact that cash is still a big component of the economy, which represents a several hundred billion dollar market opportunity for FinTechs and online platforms.

After the Ding Acquisition …

The conversation came as PayU announced earlier in the month that it acquired electronic deposits and payments platform Ding from CredibanCo, expanding PayU’s reach across Colombia and offering additional financial services and products to its customers there.

Read more: PayU Acquires Payments Platform Ding from CredibanCo

Shiliashki said that at a high level, the acquisition of Ding will give PayU the ability to move beyond the digital payments options it already provides (including those in Colombia) to offer a number of additional financial products and services to help merchants build their own online businesses.

In just the past year, he said, more than 18 million online consumers have come through and used the PayU platform to buy goods and services in Colombia alone.

“That activity gives us tremendous insight and data into the market,” he said, which, in turn, will help those firms reach end users across the country and across various online and offline channels.

… a Single Point of Integration

The roadmap is one where the combined PayU/Ding would bring financial services, access to capital, small merchant financing and working capital at a single point of integration.

“We are looking to bring this into one core offering,” said Shiliashki.

In providing financial services to SMBs, he said, PayU can help give those client firms the ability to manage their businesses more seamlessly, gain access to capital more easily and offer any digital payment that the end consumer wants.

“In this way, these SMBs can more easily complete with the larger enterprises’ eCommerce experiences,” he said. Open banking and instant payments are converging in ways that will let merchants sell across markets, with acceptance of local debit and credit cards.

“The combination of PayU and Ding gets us even closer to that ecosystem of regulated banking, fund flows and alternatives to existing payment methods,” he said.

A seamless movement across financial offerings is more highly valued than using plastic cards loaded with cash, wielded at the point of sale. Apps and ecosystems, Shiliashki said, give users immediate feedback that they’ve completed purchases, informing them of remaining balances and loyalty rewards.

“There’s a constant opportunity to engage with consumers — and we’re seeing that merchants want that more and more often,” he said.

With a nod to the super app competition that is heating up throughout Latin America, Shiliashki said PayU remains a service provider that is agnostic over who is going to win more market shares.  The company operates broadly enough so that PayU can conceivably work with everyone — and can help partners design more robust consumer experiences, all the way through to the checkout process.

Looking ahead, and at least thus far, he said PayU has not seen much in the way of demand for crypto — at least not in terms of merchant acceptance. However, the company does have in-house capabilities to facilitate that functionality, when and if that demand materializes.

There’s plenty of opportunity to redesign and use some of the new crypto or stablecoin rails that already exist. He said PayU does have a “few things in the works” on cross-border settlement, but it’s early days yet.

Buy now, pay later (BNPL) remains on the company’s roadmap, and PayU is working with several partners to bring BNPL to several countries around the world.  BNPL has several advantages, regardless of market, said Shiliashki, combining digital payments with the ability to gain more convenient access to capital, while driving additional GMV for merchants.

“Colombia is next for BNPL,” he told Webster. “Stay tuned for more on that.”