#124: Short Takes: The Two Main Payment Layers; Is Brazil’s Lotérica the OXXO of Mexico?; Pix in Argentina; Updates
W FINTECHS NEWSLTTER #124
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Welcome to the Short Takes edition! As the name suggests, unlike deep dives, these editions will explore a variety of topics that might later evolve into full deep-dive editions.
Short Takes is designed for entrepreneurs, investors, and operators looking for quick, actionable insights.
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When we analyze how different countries evolve in their adoption of payments, the Asian market stands out as a clear example of how digital wallets can transform economies.
We can divide money movement into two layers. The first, the First Layer, involves the direct flow of money through the banking infrastructure, like Pix in Brazil. This model requires a more robust financial structure, making implementation costly — something many countries have faced and are still dealing with.
The Second Layer, on the other hand, is where private platforms, like digital wallets, move money within their own networks. Banking settlement only happens at the end of the process, reducing costs for low-value transactions but relying on bank integration, which can lead to market concentration.
In Asia, this model gained traction. High initial levels of unbanked populations created a fertile ground for solutions like Alipay and WeChat Pay, which connected millions and built complete ecosystems within super apps. Their efficiency came from internal transaction processing and aggregated settlements — like in WeChat Pay, where money only reaches the bank at the end of the day.
In the U.S., examples like Zelle and Venmo follow the same Second Layer logic, but in a more developed banking environment.
In Latin America, the landscape is more fragmented. Countries like Argentina and Peru are trying to integrate local solutions, such as Mercado Pago and Yape, with national payment infrastructures, strengthening the First Layer and optimizing financial efficiency.
In Brazil, Pix centralized payments, making private wallets unnecessary for instant transfers. Mandatory adoption by banks and free transactions for individuals helped Pix thrive, while PicPay had attempted a similar Asian-inspired model back in 2019.
Each country leverages its own characteristics and technology to enable money movement. While Asia capitalized on super apps, Brazil redefined simplicity with Pix. In the end, all these stories share the same principle: making people’s lives easier.
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Lottery retailers, traditionally associated with cash payments and bill payments, are becoming a new hub for financial digitalization in Brazil. Since late 2023, credit and debit card payments at these locations have surged, driven by competitive fees and fee exemptions for public bank customers (link to the Infomoney article 👉 here).
This trend reinforces a recurring pattern in the market: digitalization doesn’t happen solely through technological innovation — it happens because, at the end of the day, it has to make financial sense for the user. In Edition #121, where I discussed how OXXO has evolved beyond a convenience store into a payment player, I highlighted the need for physical infrastructure to drive better digitalization in payments and the economy.
Check it out here 👇
In OXXO’s case, cash is still king. Mexicans still use physical locations as bank branches and prefer paying with cash.
For Brazil’s lottery retailers, however, paying bills by card — with a 1.08% fee for debit and 2.95% for credit — has become a viable option compared to other methods, especially for those needing more budget flexibility.
The numbers back up this shift. In just one year, card transactions at lottery retailers have grown by 60%, with major adoption in cities like São Paulo, Rio de Janeiro, and Curitiba. This phenomenon illustrates a broader trend: consumers prefer solutions that reduce cash dependency without sacrificing convenience. If there’s one key takeaway here, it’s that banking digitalization doesn’t advance simply because banks or fintechs want it to — it moves forward based on consumer behavior. When users adopt new habits, the market adjusts and expands its offerings. In the end, technology wins not just because it’s innovative, but because, for consumers, it simply makes more sense.
🇧🇷 Latin American Fintechs Expand Beyond the Basics - 👉Finsiders
According to the study, conducted in partnership with Payments and Commerce Market Intelligence (PCMI), the region is entering a “second phase of financial inclusion.” This new stage is marked by the growing adoption of “emerging products” beyond the basics. This shift is driven by the wider availability of essential financial services and the maturing of the financial ecosystem.
The report highlights, for example, that a relatively high percentage of users turn to fintechs for access to products such as cryptocurrencies (75%), prepaid cards (66%), BNPL solutions (46%), investment instruments (43%), and foreign currency accounts (39%).
🇦🇷 MercadoLibre's payment processor offers Pix as Brazilian tourists flock to Argentina - 👉 Reuters
"Brazilians adopted Pix as their preferred payment method due to its practicality, costs and speed," said Priscila Faro, a Mercado Pago executive in Brazil, in a statement. "Now, we're bringing this convenience to tourists visiting Argentina."
Travel trends have shifted in recent months, however, as Argentines empowered by a stronger peso vacation in Brazil, where the real has plummeted.
Mercado Pago's tie-up with Pix, according to the firm, hopes to boost consumer spending in Argentina while cutting out the need for Brazilian tourists to exchange their hard-earned reais.
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Until the next!
Walter Pereira
Disclaimer: The opinions expressed here are solely the responsibility of the author, Walter Pereira, and do not necessarily reflect the views of the sponsors, partners, or clients of W Fintechs.