PicPay had planned to hit that number in December 2020.

According to Reuters, Brazilian digital wallet PicPay expanded its user base to 20 million customers in early May as lockdowns and social distancing compelled people to run their lives digitally.

Gueitiro Genso, CEO of PicPay, said the rate of opening of new accounts had spiraled by 6X. This followed the closure of thousands of stores in Brazil since March. (Reuters)

How the virus boosted PicPay’s business

PicPay opened on average around 500,000 accounts a month and boasted of 13.4 million accounts at the end of 2019. However, since mid-March, this rate exploded sixfold.

“Social isolation has accelerated the trend towards digitalization,” Genso said. Small businesses such as bars and restaurants, which were hard put to keep up with the demand for deliveries, had to resort to digital payments.

Services that benefited from social isolation such as Netflix, iFood the food delivery app, and others started to accept payment via PicPay.

On the other hand, rival StoneCo has announced large cuts to its workforce leading to a sharp decline in its stock price. The COVID-19 pandemic has forced thousands of small and medium-sized businesses, many of which were the company’s customers, to close down.

Demand for PicPay’s services was also boosted because governments and communities had started to use its app to pay out social benefits.

Financial inclusion in LatAm

Last month, according to S&P Global Market Intelligence, the virus outbreak could deliver an unexpected benefit: it could propel financial inclusion in Latin America as governments seek tech-enabled fintechs as partners for the distribution of state aid to large segments of financially excluded people.

“It’s time for the fintech slogan of financial inclusion to truly come into play,” Argentina’s Fintech Chamber President Ignacio Plaza told S&P Global Market Intelligence. “If the government keeps relying on us to help them distribute this aid through fintech wallets, people will start to use them more and more and become acquainted with their practicality and power,” he added.

According to PicPay’s Genso, PicPay is likely to process transactions worth 31 billion reais during 2020, about six times higher than what it did in 2019.

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