48 millions unbanked

The 5 superstars of Brazilian Fintech

neobanks in brazil

Brazil is the major economy in South America, which makes the country a strategic player in the global market. With a population of over 220 million, more than half of which are connected to the internet by smartphones, Brazil is also the largest fintech hub in that area. 

According to data released by Global Index, there are still about 48 million unbanked Brazilians, yet these people move almost $240 billion of the national economy per year. An important fact that makes us understand the reason for the rapid rise of the fintech sector in a country where the banking system is described as too traditional. In this framework, 5 main APPs are changing the financial scenario in Brazil.

Nubank, The World’s Largest Digital Bank

With +40 million customers, Nubank is not only Brazil's largest neobank, it is also the largest digital bank in the world. Not bad for a company founded in 2013 in São Paulo due to fight the “bureaucratic slowness of traditional banks," said co-founder Cristina Junqueira. In a short time, Nubank found its own way to success by a range of simple, secure and fully digital solutions such as the NuConta bank account.

In 2019, the company also tested its personal loan products and took its first steps abroad, opening offices in Mexico and Argentina.

Currently, Nubank has a valuation of over $10 billion, thanks in part to the support of top investors such as TCV, Sequoia Capital and Tencent. Moreover, in partnership with Swiss insurance company Chubb, the company launched Nubank Vida, a fully digital life insurance service. A jolt for the local market, but Nubank's advance went further. In 2020, in the midst of the pandemic outbreak, the company acquired Easynvest - an only portal dedicated to investments APP - Plataformatec and Cognitect - two companies focused on search talent in software engineering.

EBANX, AliPay With Brazilian Characteristics

Bringing Brazilians to cross-border payments digitally by leveraging the growth of e-commerce, this is EBANX mission, Brazil's leading cross-border digital payment platform. The startup was launched to answer an objective problem: with the growth of e-commerce channels and with Brazilians credit cards that only provide payments in national circuits, how to support cross-border payments for retail operators?

From this simple intuition, the journey was all uphill. By providing a B2B platform that accepts debit and credit cards valid throughout Brazil in addition to the boleto, EBANX has enabled Brazilian consumers to purchase from any international online portal, even those without access to a formal credit or banking account. Thus, EBANX began to sign agreements with other companies to allow cross-border payments, but the real turning point came in 2013, when the portal signed a partnership with the Chinese giant AliExpress.

The Hangzhou-based hi-tech company has not only brought its know-how, but has allowed EBANX to become the main money-exchange channel for payments between Chinese and Brazilians merchants. The result? Business volume tripled, and the prestigious collaboration has also opened Spotify and Airbnb doors to EBANX.

Today EBANX has offices in Brazil, Mexico, Argentina, Colombia, Chile, Peru, Ecuador, and Bolivia and offers over 100 payment options to Latin American merchants and has already helped over 70 million people access its services.

Creditas, The 100% Brazilian Home Equity

Creditas is a secured loan fintech APP launched in 2012. With a valuation of $1.75 billion, the portal's main goal is to find solutions to the inefficiencies and monopoly of the traditional banking system. According to data, 75% of Brazilians have a home and car with little debt to pay. Thus, Creditas idea has always been to refinance customers' expensive debts using all user properties as collateral, being a platform that could provide end-to-end funding reality.

Creditas began to focus on so-called home equity credits, a type of credit that is very common in other countries, but rarely offered in Brazil in those years. After an uncertain start, thanks also to the support of the major Brazilian banking groups, the company has become one of the main fully digital applications in the market of South American credit.

The watershed was 2018 when the Central Bank of Brazil accredited Creditas as a financial institution, while the substantial investment by Japan's SoftBank in 2019 gave the right fuel to boost Creditas' international mission with the start of operations in Mexico.

PagSeguro, From Computers to Smartphones

As part of the Brazilian giant Universo Online, PagSeguro, founded in 2006 as an online payment platform for the growth of the e-commerce sector in Brazil, is now a full-fledged e-wallet. Very often compared to WeChat Pay, its business model is not very far from the Chinese giant.

According to the company, its goal is to promote a secure, convenient, simple and mobile-first end-to-end digital banking ecosystem, for both merchants and consumers. The foray into the POS payments sector in 2013 was also a milestone for PagSeguro's growth, which allowed merchants to receive payments in person and facilitated operations also thanks to the introduction of QR Code.

PagSeguro is focusing its activities on customers less served or ignored by the incumbents and today, the company allows consumers to choose 37 different collection methods, all conveyed by the PagBank digital account which offers 8 withdrawal options including wire transfers, cash transfers, bill payments, telephone credit top-ups and much more.

Neon, The digital Bank of Millennials

Technology at the service of consumers, this is the Neon’s business philosophy, the APP founded by Pedro Conrade who over the years has redesigned Brazilian digital finance. Neon was born with a clear purpose: providing an accessible bank account to any Brazilian, putting the user experience at the centre of everything.

Conrade, on his own admission, sought inspiration in other digital banks such as Simple in the US, N26 in Germany and Monzo in the UK. Launched in 2016 as a simple digital account, Neon has grown into a digital bank over the years. Considered a true “democratic bank”, for treating all customers equally, Neon has always made its customer service its strong point, mostly of them are millennials, with a medium-low income, but highly technological and always connected to the web.

Neon offers its users a vast network of services including investment plans, loans, unlimited bank transfers as well as the ability to use PIX, the free instant payment system of the Brazilian Central Bank. Furthermore, since 2019 Neon is also providing its own credit cards, competing directly with Nubank.

A curiosity? With Neon cards, the first withdrawal of the month is free, a marketing gimmick that has made the number of users of this innovative digital bank soar.