9 minute read
PAYVÁLIDA
One of the first payment Grupo empresarialgateways to incorporate cash payments providing financial and digital inclusion to a vast majority of the population.
Advertisement
PAYVÁLIDA
click!
Payvalida is one of the first payment gateways to incorporate cash payments allowing financial inclusion of a large segment of the Latin American population. Serving more than 2.700 International and Local merchant businesses, it makes it possible for unbanked consumers to take part in the digital ecosystem and enjoy the benefits of online shopping. Following Silicon Valley’s innovation practices, this startup formed in Colombia in 2011 has expanded across Latin America growing at 10x rates during the past 3 years. Excellence in operations and support, led to partnerships with key players in the digital world: from Videogaming and Entertainment platforms, to insurance companies and banks, covering most verticals in e-commerce.
Buying online has enabled customers to have access to the best products and services in the global market and discover new experiences. Nowadays it seems obvious that anyone can have access to online shopping but in the past, it was a privilege reserved only to those who were considered worthy enough to be granted credit cards by banks. This was a requirement that left millions of customers in Latin America completely out of the e-commerce world.
10 years ago, Payvalida set on a mission to remove that gap and made a bet on financial inclusion, connecting cash collection networks and domestic payment methods, with merchant businesses to serve Latin American customers. As a result, a vast majority of the unbanked population now has access and can enjoy the benefits of online shopping.
To this date, cash remains as one of the favorite payment methods for Latin Americans, a region where cash is still king. “Since we started, we have been able to understand consumer payment habits and we continue giving them what they need”, explains Jorge Vélez, CEO and Co-founder of Payvalida. “The digital transformation trend
Jorge Vélez, CEO and Co-founder of Payválida
seen in recent years has allowed more Latin Americans to access products and services online, and we have been a reliable ally to grow with businesses meeting consumers where they are. As online shopping methods such as domestic debit/credit cards”.
STARTING AT HOME, LITERALLY
Payvalida was born in 2011 in an apartment in Medellín, Colombia. In Jorge Vélez’s house, He and co-founder John Becerra met with the desire to create a project focused on digital democracy and financial inclusion. Both had previous industry experience where they saw first hand that a large percentage of the population was excluded from the digital world due to payment restrictions. “Access to products and services from the web should not remain as a privilege reserved to credit card-holders”, mentions Jorge. “We focused on being the solution to bring consumers closer to their favorite online products without banking services or formal affiliation to the financial system. And as it turns out, in Latin America this corresponds to the vast majority of the population”.
Jorge and John were convinced that democratizing access to online commerce was a solid bet for the country’s socio-economic growth. They started working on the platform by bootstrapping with their own money: a payments gateway relying on thousands of cash collection physical kiosks -similar to 7 Eleven in the US- available throughout the country, where users initiated a purchase online and completed the cash payment at a kiosk nearby. This would open the door to millions of consumers in Colombia living in rural areas or neighborhoods distant from major urban areas. At the same time, it helped increase the payment transactions for Merchants selling online so it was a clear “win-win” situation. Payvalida started as a dream in an apartment in Medellín, but their perseverance has taken them to more Latin-American countries and to Silicon Valley in San Francisco, where they raised funding.
Payválida started as a dream in an apartment in Medellín, but their goals have taken them to other Latin American countries and to Silicon Valley in San Francisco.
TIME TO ENTER TO THE GAME
While working on the platform, the Payvalida team knocked on doors of different businesses. They quickly identified an industry that benefited from this payment model and was expected to grow exponentially within the next few years: videogames. It was the perfect opportunity to attract Latin-American gamers to international gaming portals and the monetization model was the perfect one for Payvalida to take off.
This is how in 2011, two companies decided to give Payvalida a chance. The first one was the finnish Habbo, a social media platform for teenagers that at the moment had 200 million registered users. The second one was Axeso5, the largest Latin-American videogaming platform, from Argentina. “We signed a contract over email and things moved pretty quickly. Both companies wanted us to go live almost immediately, because they had already begun marketing efforts to get consumer interest ”, says Jorge.
June 9th was a day for celebration: the first transaction in the Habbo platform and Payvalida’s first successful payment. “A company from Finland, so far from Colombia both in location and culture, trusted our company and our model; this made us really proud and hopeful of our company’s future”.
A new beginning with many challenges for the team emerged: expanding the platform with newly requested features, providing customer support, and maintaining a high quality bar. Initially, the Customer Service calls reached us at our own houses but it grew so fast that we couldn’t keep up; then, we quickly realized it was time to grow our product and team.
GAMERS: A DEMANDING SEGMENT
The videogaming industry was a great enabler for Payvalida’s growth. As gamers discovered the ability to pay easily and securely using Payvalida, they started to demand other game sites to adopt it so they could pay using local payment methods like cash and domestic debit cards. Gamers are a young and extremely digital segment who has high expectations and payments are not the exception: “Reputation is generated in forums; if you respond on time and provide a great service, gamers post about it and rate you well, and that creates growth opportunities through wordof-mouth”, Vélez explains. At the same time, focusing on this type of consumer is challenging: if their experience is not satisfying, they will not hesitate to express it. “Young users entrust us with their money and we take this responsibility very seriously. Thanks to this segment, we have strengthened not only the user experience of our technology but also customer service through channels like chats and social networks. We feel better prepared to resolve technical and business concerns our customers face”.
GROWTH AND BIG TECH
Expansion due to growing demand for similar payment requirements in Latin America followed. In Ecuador, Perú, and Costa Rica they found similar patterns and entered with an effective strategy: creating companies with local partners who have experience and knowledge of the market, while reusing the underlying core technology. In 2013, Payvalida attended E3 (Electronic Entertainment Expo) in Los Ángeles, an event focused on videogames and global entertainment. They were able to convince important industry actors by exposing them to the tremendous growth opportunities in Latin America when the appropriate payments strategy is used. Put simply, this was and still is,
the only way to reach all the population in order to directly impact digital and financial inclusion. Many important companies in the industry started seeing Payvalida as a strategic ally in the region. Businesses like Riot Games (creators of the popular videogame League of Legends) saw their sales grow exponentially in the four countries, something that they wouldn’t have been able to achieve otherwise. Payvalida soon discovered that other sectors could benefit as well. The traditional payment gateways used therein only offered integration with banks and credit cards, while Payvalida provided this, in addition to cash collection agencies providing massive reach to meet consumers anywhere. The Colombian startup gained interest from Silicon Valley where they found a new partner who was inspired by a
mission to close the digital inclusion gap in Latin America. This new partner not only invested their first ever Angel round, but continues providing technical mentorship and connections in the Big Tech environment since.
The team has participated in immersion programs in Silicon Valley to get first hand knowledge on best practices of leading tech companies, the world of Venture Capital, and startup scaling. This led them to identify concrete efforts to scale the business and operations, acquire great human talent, and expand their partners network. This working business model has attracted other Fintech companies to use Payvalida’s services into their platforms. Payvalida went from serving the e-commerce market, to supporting other payment gateways that needed solid know-how and distribution. “There are currently 15 gateways in Latin America that offer services to their clients using Payvalida as a back office for transactions covering cash, bank transfers, and credit cards”.
John Becerra, CMO and co-founder of Payválida
SECURITY FIRST
Security certifications are a critical requirement for financial and payment transactions. For the fifth consecutive year, Payvalida complied with the PCI-DSS standard, strictly adhering to secure practices that protect user’s data. The startup also follows continuous practices of “ethical hacking” with specialized partners in the Cybersecurity space. Everytime there is a change in the platform, a rigorous security check confirms that no security vulnerability is found before releasing to production.
In 2020, and due in great part to the pandemic, e-commerce has forced companies to rethink their online presence and payments strategy. Payvalida’s reputation as a secure platform with robust mission-critical technology, has attracted attention from banks and companies supervised by the financial superintendence, for whom they process payments. They expect to soon add large Latin-American banks and insurance companies, thanks to the combination of differentiating value, efficient customer service, and data security.
THE FUTURE IS INCLUSION AND COLLABORATION
Following a recent rebrand, Payvalida’s new mission is to “click” with good ideas and connect people with their dreams. The accelerated growth and expansion of the company has been possible thanks to a high-performing team, rigorously selected and enriched through constant learning. The combination of human talent and the latest technology trends is what has allowed this business to grow at a rate of 10x year-over-year and what motivates its purpose to reach more countries in Latin America in the upcoming years.
In 2020, the pandemic brought the possibility of continuous growth, as thousands of businesses need to reinvent their online sales strategy. Payvalida has become a great ally to guide them in the process of digital transformation with agile and secure payment methods that connect them with all consumers. Ten years ago, the founders of Payvalida wanted to unleash a new world of online opportunities for Latin American consumers. Today they also do so for digital businesses in a constantly evolving journey with well established payment methods and emerging ones like QR-Codes, and Cryptocurrency.
