Cashback at retailers finally gain momentum in Brazil
Initiatives to allow consumers to withdraw cash at stores are beginning to emerge in Brazil, given the relevance that paper currency still has for most of the population and the need of making the service cheaper and more efficient. The trend may seem like counter-intuitive, as methods of payment become more digital, something the pandemic accelerated, but aligns the Brazilian market with practices adopted for decades in other countries.
TecBan, owner of the Rede24Horas chain of ATMs, controlled by the country's largest banks, took the latest step. It has just launched the possibility of withdrawal at points of sales, available for about 100 banks, payment institutions and fintechs that want to offer the service.
TecBan will begin the offering in 15 places, such as Piracuruca in Piauí, Garrafão do Norte in Pará and Centro do Guilherme in Maranhão. In the beginning, 100 stores are accredited. I hopes to reach 100,000 by the end of the year. Consumers wanting to withdraw cash may take a ticket at a totem and ask for the money at the cashier, request the amount using the card machine or ask the cashier to scan a QR code via app.
In the justification, the company points out that 60% of classes, C, D and E, especially in remote parts of the country, withdraw cash often and form a group that can't be neglected.
Another motivation the company mentioned is that cash in circulation corresponds to 3.9% of the Brazilian GDP - in comparison with 9% in India and 21% in Japan - which means the country needs to be more efficient for the money to circulate rapidly. "We want to promote financial inclusion. The model of ATMs has limitation of costs and security," TecBan's Director General Jaques Rosenzvaig says.
The pandemic made even clearer the need of making money circulate. With the distribution of emergency credit and cash transfers to help families and businesses navigate the crisis, the total of cash in the hands of people and of the bank network reached R$333.6 billion on July 13, from R$250 billion in late February, according to Central Bank data.
"The emergency aid, without doubt, brought more volume. But it is not only that: many people prefer to have cash to control the budget, especially in times of uncertainty," Mr. Rosenzvaig says. TecBan saw the volume of cash withdrawn in the first half of July grow 25% from April.
The new service from the largest operator of ATMs in the country is a sign of change. Fintech and digital banks emerged based on...
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