We sat down with Luiz Henrique Didier Jr., the CEO of Bexs Banco, at Money 20/20 USA to discuss more about Bexs, its transition to Ebury, recent developments in Brazil, and the company's future goals.
Could you tell us a bit about Bexs, and what problems do you solve for whom?
Bexs initially started out as a foreign exchange brokerage in 1989 and later acquired a bank licence in 2010. This was a significant shift because the bank licence enabled us to fully digitalise FX in Brazil at a scale.
In Brazil, less than 20% of credit cards are authorised to make international purchases. This meant that most Brazilian shoppers could not shop on international ecommerce platforms like AliExpress. We provide a solution to these platforms which converts foreign currency to BRL, facilitates the BRL payments with local methods, as well as handles the FX while eliminating the exchange rate risk, especially given the volatility of the BRL. This helped international merchants sell products to Brazilians without complicating the payment process.
We also applied the same approach to investment, as a large percentage of Brazilians believed it was illegal to invest abroad. However, when conducted in compliance with regulations, investments abroad are possible. Therefore, Bexs helps in digitalising investments, together with our partner Avenue, a US-based brokerage offering direct investments in Nasdaq. We also work with neobanks such as Revolut or Nubank, allowing Brazilians to have wallets in different currencies like USD, GBP or EUR. Bexs helps facilitate the FX transactions in this process.
In essence, we consider Bexs to be an international payment platform with a bank licence. This licence enables us to operate without limitations on transaction volumes, while still complying with Brazilian regulations.
Congratulations on receiving the approval from the Central Bank of Brazil regarding Bexs’ acquisition by Ebury. What would you say is the main value of this acquisition for both Bexs' and Ebury's customers and partners?
The approval from the Central Bank of Brazil for Bexs' transition to Ebury is a big deal on both sides. The value of the acquisition is two-fold.
First, it makes processes much easier for Brazilian companies to do business outside Brazil. Brazil has been restrictive when it comes to moving money in and out of the country, due to the complexity of opening bank accounts in other countries. With this transition to Ebury, we would be able to offer multicurrency accounts worldwide with an integrated FX platform through a single onboarding process for Brazil and the other Ebury entities outside the country.
The second major value this acquisition brings is the ability to offer non-resident accounts to international companies looking to establish a presence in Brazil. To offer a non-resident account to international merchants or SMEs in Brazil, you typically need to be a Brazilian bank with a licence to operate in the country. But with Ebury, we are able to make this process simpler. Once a client is onboarded with Ebury, we can leverage the same onboarding to offer them a non-resident account in Brazil. Bexs would then be able to offer the BRL as a convertible currency, which companies did not have access to until now.
So, in simple terms, this acquisition is valuable because it helps Brazilian companies and SMEs get access to multicurrency accounts abroad on a global scale and it allows international businesses to open accounts in Brazil.
Can you tell us about a new trend or development in the digital payments space in Brazil and LATAM?
I think the answer to this would definitely be the introduction of Pix, as it was a game-changer for Brazil. What's particularly interesting about Pix, especially when compared to other similar systems, is how the Central Bank of Brazil designed it. It was made mandatory for all major banks, acquirers, brands, and major players in the payment industry to be part of the Pix ecosystem. Right from the beginning, Pix was built to be interoperable, meaning it could work with multiple financial institutions seamlessly, which led to its success.
Currently, the majority of Brazilians are already using Pix because it is instant and available 24/7. This ended up as a significant shift from the past when many people had to handle cash regularly for payments, even for small things such as buying a bottle of water. Now, however, they can make use of digital wallets linked to Pix for convenient transactions.
Pix operates by linking to your bank account, it is also safe because all transactions happen within the secure process of the bank's app. No one involved in the transaction has the full information of the user's account, except for the Central Bank of Brazil. This would make it more challenging for fraudsters to manipulate when compared to some other forms of digital payments.
There seems to be interest in adopting similar systems in other Latin American countries, however, it does require a combination of the public and private sectors working together. In Brazil, the public sector mandated Pix, and the private sector adopted it. I believe that the next step in Brazil is an expansion to all kinds of payment using the Pix ecosystem. Instalment payments, recurring payments, credit services, and more within the same ecosystem.
Looking back at 2023, what achievements or milestones of Bexs do you feel proud of?
Reflecting back, the best achievement of 2023 would be our contribution of allowing Brazilians to use Pix 24/7 to load their wallets, whether it's through partnerships with institutions like Nubank or Revolut.
In the past, when Brazilians travelled, we had to carry a lot of cash and make various arrangements for currency exchange. With Pix, however, it has become as simple as doing a transfer. So, if you find yourself in a place where you need to make a payment but do not have the local currency, you can do a Pix transfer to load money in Revolut or Nubank wallets. Through our partnership with these neobanks, we streamline the process, handling everything related to FX and enabling payments in the desired foreign currency.
Looking ahead, what are Bexs' strategic plans and priorities for future growth and development?
For me, this answer is simple. Bexs' priorities for future growth and development are around expanding our services to the B2B sector. We want to provide the B2B market with international accounts for non-resident international companies, which aligns well with Ebury's focus on FX for B2B.
We want to make the same convenience that Pix offers to individuals available for businesses as well. As I mentioned earlier, Brazilians in the past used to travel with just carrying cash. Now, they have access to another currency in their own account. The next step for us would then be to offer this to B2B, which is much more complex.
Currently, for businesses in Brazil, the process of conducting cross-border transactions can be quite complex. It involves lengthy onboarding processes, KYC checks, and waiting for business days and hours to complete transfers. Our goal is to simplify this process, making it as efficient as the Pix system for individuals.
We want to make it easier for companies to conduct transactions 24/7, both within Brazil and internationally. We anticipate launching this at the beginning of next year.
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