NovoPayment (novopayment.com) pioneered the Latin American prepaid card industry ten years ago, and has now reinvented itself as a provider of open banking APIs. Its vision is to help Latin America’s fragmented payments systems cope with expanding demand for e-commerce and m-commerce. Robin Arnfield reports.
NovoPayment was founded in 2004 by its CEO/President, Anabel Perez, as a spin-off from a major South American bank. Since 2007, Miami, Florida-based NovoPayment has been a service provider for varied stored-value programmes in Latin American countries both on a white-labelled basis and through its own local subsidiaries in Mexico, Peru, Colombia and Venezuela. Currently, NovoPayment has over 70 programme deployments and over 9,000 corporate users of its platform.
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In 2009, NovoPayment was granted a Principal Member licence by Mastercard to issue prepaid cards in the region, becoming Mastercard’s first non-traditional institution in Latin America to receive the designation. It also has a Visa licence.
Expansion
Over the last few years, NovoPayment has expanded beyond the prepaid card market, and now offers cloud-based technology enabling banks and payments firms such as e-money issuers to offer B2C and B2B2C mobile financial services and mass disbursement services, for example.
It has a new practice area serving emerging gig economy companies in Latin America, and is working with correspondent bank agent networks on payments collection for unbanked consumers shopping digitally.
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By GlobalData“One of the largest correspondent banking agent networks in Latin America is a client of ours,” Perez says.
Correspondent banking agents provide cash-in/cash-out and other banking services to unbanked consumers through convenience stores and other non-bank outlets.
Currently, NovoPayment is active in six Latin American markets and plans to add an additional two countries. “We’ve always been self-funded,” says Perez. “However, we want to accelerate our growth, and would not rule out any capital-raising options going forward.”
Unlike fintechs, which are typically started by technology specialists who lack banking experience, NovoPayment’s management team originally came from the banking industry. Perez, for example, was Senior Vice President, Retail Banking until 2008 at Banco Venezolano do Crédito, one of Venezuela’s leading banks.
Developer Hub
In October 2017, NovoPayment joined the open banking movement in order to address weaknesses in Latin America’s closed, fragmented and legacy systems-based banking and payments infrastructures.
Lack of interoperability between Latin American payment services and gateways means the region’s financial services infrastructure is under strain due to the rapid expansion of e-commerce. For example, existing payments services lack the capability to address the growing demand for mass payouts in the gig economy, NovoPayment says.
NovoPayment cites estimates from US-based consultancy Americas Market Intelligence that the Latin American e-commerce market is growing at over 20% a year, while Uber ride volume rose tenfold between 2015 and 2016 in the region. In some major Latin American markets, the rate of growth of m-commerce will be two to three times that of e-commerce, Americas Market Intelligence estimates.
NovoPayment has launched a Developer Hub which it describes as a bank-agnostic, multi-geography portal providing PCI-compliant APIs to software developers for use in building new payments/banking products or enhancing existing products.
APIs
As of October 2017, the portal offers 37 APIs targeting a range of Latin American geographies and verticals including banking, service organisations, insurance, urban delivery and transportation, and travel. Additional APIs will be offered in the near future, NovoPayment says.
Existing APIs cover areas such as account creation (individuals, enterprises, merchants, correspondent banking agents); cash transfers (cash-in/cash-out, P2P, cash disbursements and collections); account enquiries (account balances, recent transactions, transaction history, transactions by category, agent commission history); KYC/AML compliance; and customer support tools such as account/card verification and blocking/replacement.
NovoPayment says its Developer Hub uses REST (Representational State Transfer) architecture, an interoperable protocol for networked applications. It offers a sandbox mode that lets developers test NovoPayment’s APIs prior to deployment in a production environment.
Showcase
“The Developer Hub showcases the API capabilities that we’ve developed and that are already in use by some of our bank clients with their business customers,” says Perez. “All the APIs are already fully tested and can be deployed in a production environment very quickly.”
NovoPayment offers its APIs in three different ways to its clients. “They are available on a white-label basis, or as modules on our open API portal (Developer Hub),” says Perez. “We also offer custom solutions and consulting for clients with specific needs.”
NovoPayment is interested in partnerships with existing players in the global B2B/P2P payout/remittance market, Perez says.
“Using our APIs they could offer more integrated solutions to their clients,” she says. “We would also love to partner with banks which already have embraced open banking, to provide APIs complementing their existing technologies.”
NovoPayment is already talking to a number of Latin American fintechs about using its KYC APIs in their customer on-boarding processes, Perez notes.
Facebook Messenger
In January 2017, NovoPayment upgraded its platform to enable its clients to deploy their own bots for Facebook Messenger. The company said the service enables financial institutions, retailers, and travel organisations to allow their customers to conduct P2P payments within Messenger. Their end-customers can also use Messenger to open accounts, and check balances and transaction histories.
“Our Facebook Messenger chat technology is now in production,” says Perez. “We’ve been integrating it with some large financial services players as well as with Visa and Mastercard so we can enable solutions for chatbots and other potential AI applications.”
