Pundi X
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Pundi X

XPOS® Merchant: Pago Digital explores the potential of blockchain-based digital currency

Based in Brazil, Pago Digital started as just Rakan Almerida’s dream to have a business. He wants to become one of the pioneers in Latin America’s digital services scene, with the eventual aim of having a substantial presence in each state of Brazil.

The value of this goal cannot be overstated. Over the past few years, Brazil and the rest of its Latin American neighbors have become a veritable boomtown for the digital payments scene and with good reason. Smartphone penetration in the region is at 60 percent and is expected to reach 76 percent by 2025. Additionally, the volume of online sales in the region is growing at about 19 percent per year.

As a result, some Latin American businesses have sought out partners to streamline and speed up the adoption of digital payment systems. In Pago Digital’s case, they’ve adopted the XPOS® platform developed by Singapore-based company Pundi X. The XPOS® is a point of sale system that can be installed in brick-and-mortar stores, enabling them to complete transactions on the blockchain.

This case study will explore the ways Pundi X’s XPOS® platform have impacted Pago Digital’s business and what the future may hold for their partnership.

The challenge

Despite the inroads made by the Latin American digital payments sector, there’s unfortunately still a long way to go. About two-thirds of their population still prefer cash to credit, a result of a situation wherein 55% of people do not have a formal bank account.

It’s therefore worth noting that one of the first challenges, therefore encountered by Pago Digital was acquiring their very first XPOS® device back in early 2018. Though XPOS® devices are now deployed in a total of 30+ countries — in South America, the devices first touched down in Argentina and Colombia.

Fortunately, Pago Digital’s Rakan Almerida describes the XPOS platform as “very simple and easy to use” and that all it took to master the device was a few days of using it and getting acquainted with it. The challenge then stemmed not from the XPOS® device itself, but rather winning over critics who either didn’t understand or distrusted digital payments.

Fortunately, Brazil is the Latin American country where e-commerce is the most present: 15% of online shoppers make at least one transaction every three days, and 21% of people use e-commerce at least once a week. This can smoothen the transition to eventually get physical stores to transact in digital currency, the main selling point of the XPOS® platform.

The why

At first, Pago Digital considered investing in blockchain wallets as a digital payment solution. However, it was then attracted to XPOS devices as it represented a revolutionary way of doing things. It also helps that a huge chunk of Pago Digital’s user base is very much in the market for digital services.

Furthermore, what convinced Pago Digital to adopt Pundi X solution is its established track record. In addition to the XPOS®, Pundi X has also developed other blockchain-based devices, such as the Blok On Blok, the world’s first fully-functional blockchain phone.

All of these go hand in hand with Pago Digital’s eventual goal of having sales promoters positioned with XPOS® devices in each of Brazil’s 26 states, offering blockchain products and services.

The result

Pago Digital’s use of XPOS® device enabled them to increase the volume of transactions happening with digital currencies, as well as seamlessly pay and receive payments globally. It’s this convenience that resulted in them being able to capture the loyalty of a new, more tech-savvy customer base.

Rakan Almerida’s work desk with XPOS® and XPASS cards

Aside from a small critical minority, the use of XPOS® in stores was generally met quite favorably. It received praise for being innovative and efficient.

According to Pago Digital, it would then also recommend the use of XPOS® devices to other businesses. Specifically, the company recommends it for transport, health, food, security, and cosmetics due to its ease of use and efficiency.

Looking to the future

The possible impact of digital payments on Latin American society cannot be ignored.

As mentioned above, a slight majority of Latin American citizens still lack a bank account, thanks to the complicated process it takes to open one. It requires financial records, proof of citizenship, and other documentation — all on top of inevitable delays and red tape.

Digital payments can go a long way for financial inclusion. Backed with blockchain technology, the decentralized nature of digital payments can significantly cut down on the costs of transacting. Furthermore, digital payments also make transactions easier to trace, ensuring that no compromise has to be made with regards to transparency and security.

Considering Latin America’s high rates of cryptocurrency adoption, it’s clear that the region is ready for new fintech solutions. Though startups like Pago Digital and Pundi X will still undoubtedly face challenges in the form of government regulations and the like, the XPOS® journey in Brazil shows us that the adoption of digital payments is a matter of when and not if.

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