Visa, NovoPayment using APIs to wean Latin American businesses off cash
NovoPayment, a payment provider focused on Latin America, is working with Visa to help local banks work with Latin American businesses to migrate from their high levels of cash usage to digital payments.
The companies are planning to develop B2B and B2C payment APIs for banks in the region. The initiative aims also plan to address the fragmented nature of the region’s banking and payments networks.
Over the past year, Visa has been positioning itself in the B2B payments space. In June 2017, Visa launched the Visa Ready Program for Business Solutions. In October, it partnered with Billtrust to improve B2B virtual credit card acceptance. In November, Visa launched the first pilot phase of its blockchain B2B payments service Visa B2B Connect. January and February 2018 respectively saw Visa’s API partnership with NovoPayment and acquisition of B2B expense management solutions firm Fraedom.
NovoPayment has been working with Visa on open APIs for quite some time, and further announcements are in the pipeline, according to Anabel Perez, Miami-based NovoPayment’s CEO and founder. She adds that NovoPayment’s deal with Visa isn’t exclusive and that she hopes to sign similar open API deals with other payment networks.
“NovoPayment and Visa are developing joint APIs to enable Visa customers in the LAC (Latin America and Caribbean) region to deliver new digital products and services to their business clients,” Perez says. “These include instant payments and mass payout services for gig economy firms and marketplace operators as well as T&E solutions for business travellers.”
NovoPayment sees major opportunities to provide real-time payments for the gig economy in Latin America, such as for urban delivery companies and firms providing urban mobility services, Perez says. According to data from Americas Market Intelligence, Uber ride volumes rose tenfold across LAC between 2015 and 2016, while the region’s e-commerce market is growing by 20 percent a year.
“There is still heavy cash usage in LAC,” Perez notes. “Also, Latin America’s domestic and cross-border payment systems lack interoperability, which is why NovoPayment has invested in ensuring its platform interconnects with multiple end points and networks. This means that our bank clients don’t need to invest in their own integrations with end points and networks.”
FIs and business that deploy NovoPayment’s and Visa’s jointly developed APIs won’t need to apply for multiple certifications from Visa. “They can simply use the certifications we’ve been given by Visa,” Perez says.
The APIs enable participating banks' corporate clients to automate tasks such as virtual and card-based account origination, fund loading and reloading to Visa cards, recovery and redeployment of funds, and Visa account blocking.
NovoPayment, which began life as a prepaid card program manager specializing in T&E and employee benefits cards, has Principal Member Licences from both Visa and Mastercard in LAC. It has over 2.5 million prepaid card accounts, 72 prepaid card program deployments and over 11,000 corporate clients in Latin America.
“By the end of 2018, we will have onboarded three new customers including NovoPayment’s first U.S.-based client, which is based in Miami,” says Perez. “We want to showcase the potential of our hub to connect businesses in Miami with Latin America.”
Last October, NovoPayment launched its own cloud-based open API developer portal in the region, enabling banks and payments firms to offer B2C and B2B mobile payment services. It also launched a practice targeting the emerging gig economy in LAC.
“We still operate our prepaid card programs which are available on a white-label basis as well as through our subsidiaries in Mexico, Peru, Colombia and Venezuela,” says Perez. “But we’re now refocusing on offering APIs for payments enablement on our bank-agnostic, multi-country and multi-currency platform. Our platform is available on a modular basis, so that banks can choose to host prepaid card accounts and other services on their back-end server or let us host these accounts for them, for example.”
Developers can test NovoPayment’s APIs on its portal and then embed them into their own programs. “We’re planning to launch a new version of the portal before the end of 2018 and will also double the number of our APIs from the current 37,” says Perez.
Working with Visa, NovoPayment supplied its APIs to the Colombian subsidiary of Ecuador’s Banco Pichincha. A case study on NovoPayment’s website explains that Banco Pichincha Colombia (BPC) increased revenue from its commercial banking customers by giving them digital cash management services including the ability to digitally manage procurements, payroll and commissions, and to offer meal and food benefits and fuel expenses prepaid cards to their staff.
Two examples of services provided by BPC to its business clients include rolling out real-time payments for urban deliveries of goods ordered online, and fee and expenses payments to independent drivers in the shared transportation sector.
“By using our APIs, BPC is seeing a 2,000 percent CAGR in transactions and fund transfers from its new service,” Perez says.
BPC is owned by Ecuador’s largest bank, but it is a new entrant in Colombia and faced significant competition from incumbents.