Brazil's prepaid card, digital wallet market to reach $53B by 2030
A new report has predicted growth for Brazil's prepaid card and digital wallet market before the end of the decade, powered by regulatory reforms and consumer behavior.
The report, compiled by Research and Markets, tips Brazil's prepaid card and digital wallet to reach $53.42 billion before the end of the decade. The market will grow by an 11.1% compound annual growth rate (CAGR) between 2025 and 2029.
From 2020 to 2024, the ecosystem recorded a meteoric growth rate, underscored by a CAGR of 17.9%. While the forecasted ecosystem growth pales compared to the numbers from 2020, the report highlights the consistency of the growth.
Several factors are powering the growth spurt in the prepaid card market. The report mentions Brazil's embrace of Pix, an instant payment system launched by the country's central bank.
The numbers behind Pix are poised to trigger a surge in Brazil's prepaid card and digital wallet market by 2029. Pix is eyeing $30 billion in transaction volume from a new automation feature, racking numbers from its broad e-commerce application.
The report also mentions changing consumer preferences as a key driver in the projected industry growth. According to the report, there is a growing demand for instant transactions in the South American country from consumers and merchants.
While digital wallets have the edge in adoption, prepaid card service providers are leaning on key partnerships to catch up. On the regulatory side, the Central Bank of Brazil has pushed to standardize and cap prepaid card fees at 0.7%.
'The goal is enhanced market fairness and expanded merchant involvement, ensuring prepaid card competitiveness among payments, thus incentivizing small businesses to adopt these methods widely,' read the report.
Major financial institutions like Banco do Brasil and Banco Bradesco currently hold most of the market share. However, the report tips fintechs like Nubank and new innovators to roll out offerings for consumers in the industry.
Brazil marches on despite challenges
Although Brazil has signaled a clear intent to pursue digitization in payments, the climb has been plagued by challenges. Its attempt at a central bank digital currency (CBDC) has been derailed over privacy concerns. Despite the challenges, Brazil's payment institutions are hurtling toward fully embracing emerging technologies. The country's largest commercial bank is exploring a stablecoin launch following plans by regulators to relax guardrails for issuers.
Alipay completes world's first payment transaction using smart glasses
Meanwhile, Chinese payment giant Alipay has announced the completion of a payment transaction using smart glasses in a pioneering move.
Alipay reached the milestone in partnership with Chinese consumer electronics firm Meizu. Alipay successfully integrated its digital wallet with Meizu's smart glasses, leveraging emerging technology to pull off the transaction.
Alipay revealed that the first-of-its-kind transaction leverages a suite of artificial intelligence (AI) functionalities ranging from voice recognition to novel authentication solutions. Furthermore, Alipay has confirmed that offline payment functionalities are being worked on in collaboration with Meizu.
'Users are able to make seamless payments with QR scans or voice commands from their smart glasses, backed by Alipay+'s AI-powered voice interface, intent recognition, and voiceprint authentication technologies,' read the statement.
Alipay confirmed that the new features will be integrated into Alipay+ partner e-wallets before the end of the year, pending the rollout of its tech suite for smart glasses. On the flip side, Meizu has been probing the possibility of offline AI-powered smart glass payment functionalities. It will integrate Alipay+'s payment SDK solutions in its upcoming range of smart glasses.
'The offline payment function of smart glasses launched overseas by Meizu and Alipay+ has set a new technological benchmark for the industry,' said Peng Guo, General Manager of the XR Division of Meizu.
Alipay has played a key role in China's CBDC experiments, setting the pace for the digital yuan's integration of red packet functionalities.
Alipay and its parent company, Ant Group, have a streak of embracing emerging technology, with its affiliate companies turning to AI in droves. Alibaba (NASDAQ: BABA) has rolled out its suite of AI solutions to rival U.S.-based offerings, while its e-commerce unit is leveraging the technology to streamline the merchant process.
Smart glasses record adoption spike
Smart glasses are surging in popularity, with Rayban's and Meta's (NASDAQ: META) collaboration driving adoption figures to new highs. With its offering, Google (NASDAQ: GOOGL) has joined the race, while a wave of Chinese consumer electronics firms are keen on pushing their products to the market.
However, the journey has not always been smooth, with privacy and health concerns trailing the launch of the offerings. From the earliest integration of Meta's multimodal AI in Rayban glasses in 2023 to processing payments, the offering has come a long way in under three years.
Watch: New age of payment solutions
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