Voice of the Industry

The integration and simplification of Pay-in and Payout in Brazil

Friday 15 November 2019 10:12 CET | Editor: Andra Constantinovici | Voice of the industry

Luiz Henrique Didier Jr., CEO of Bexs Banco, explains the difference between the terms and how these processes are affecting the payments chain in Brazil

The payments market has undergone dramatic transformation in recent years, with new terms created and old ones changed in essence and meaning. The terms pay-in and payout, for instance, were well-known in the context of investments, commonly referring to the deposit of funds into a stock portfolio (pay-in) and the distribution of net income as dividends and interest on equity (payout). However, these terms have acquired new meanings that are affecting the entire payment industry due to their complexity, especially in the case of payout. 

Local payment processing platforms, adapted to the cultures of different countries, served as a major facilitator for the expansion of international businesses without the need to set up a local office. Many foreign companies expanded their sales to Brazil and ensured their participation in this market of 210 million people by offering the payment means commonly used by Brazilian, such as bank boletos, domestic credit cards and the option of paying for purchases in several monthly installments. After processing in local currency (BRL), the foreign exchange operation was completed by a banking institution that remitted the money to the international seller. With digital payment operations via an API platform integrated to the checkout of international business, the complexities of the pay-in process are now a thing of the past. 

Meanwhile, the payout process involves a payment flow in the opposite direction, from abroad into Brazil, for example. In this case, a banking institution must carry out the operations for bringing foreign remittances into the country. 

Payout needs are growing for various needs, such as paying marketing actions involving local advertisers and digital influencers, copyrights, supplier payments, commissions etc. Google is one example of an issuer of large volumes through the payout model, when it pays the owners of content channels on YouTube for the rights of monetized views. For every USD 100, Google makes an international fund transfer to the bank account registered by the user, over which a spread is charged based on the rates of each bank. 

In the case of YouTube channel owners, which are primarily individuals and clients of the banks’ B2C segment, the transaction volume is not substantial. Therefore, bank rates, although high, are not such a relevant factor, but can still be optimized through digital payment via payout. 

In the case of companies (B2B), which may have large volumes with a high recurrence of payout transactions, it is important that bank rates during these currency transactions be competitive to ensure the sustainability of the business. It also is critical to seek simpler and faster processes in order to avoid operational bottlenecks. 

If you are thinking about automating pay-in and payout operations, it is important to bear in mind that all inflows and outflows of funds in Brazil are monitored by the Central Bank to ensure legal compliance and global standards. Some of these obligations can make the process more bureaucratic and slower. 

In these times of digitalisation of processes and more collaborative economic models involving a large number of agents operating across borders, international businesses must consider and seek tools that integrate the entire payment chain, whether in or out, as well as foreign exchange transactions, in a single platform that combines bank and payment services. In this way, they can guarantee higher participation in various markets while optimising processes and business costs via more competitive solutions and pricing. 

About Luiz Henrique Didier Jr. 

With over 25 years of experience at leading financial and payment institutions in Brazil, Didier’s fields of expertise include payment processing, marketing, product and business development and Brazilian foreign exchange regulations. At Bexs Bank, as a CEO, his main challenge is to bring innovation and technology to facilitate, through payment transactions and FX solutions, access to global goods and services for Brazilians and to the best Brazilian goods and services for the world. 

About Bexs Bank 

Bexs Bank is specialised in international payments processing and FX transactions for global e-commerce, SaaS and investments. Through a unique API Platform, our solution provides the collection of Brazilian currency via local payment methods, helping both big and small companies to connect with customers in the digital world and to expand their customer base geographically.

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Keywords: Luiz Henrique Didier Jr., Bexs Bank, digital banking, online bank, FX , payments processing, global ecommerce, ecommerce, Brazil Latin America, SaaS, payments methods, B2B payments
Categories: Banking & Fintech
Countries: Brazil
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Banking & Fintech

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