Digital bank arrives in Brazil with bet on travel and exchange

After spending the last two years developing the digital bank of BTG Pactual, a company of which he was a partner, businessman Glauber Mota is now responsible for the arrival of Revolut in Brazil.

Among digital banks, the British is the second most valuable in the world, behind the Brazilian Nubank.

With 18 million customers in 35 countries, the brand was valued at US$ 33 billion (R$ 155 billion) in its last investment round, in the middle of last year. The Brazilian bank, on the other hand, reached US$ 41.5 billion (R$ 231.45 billion at the time) in its IPO on the New York Stock Exchange, but today it is worth around US$ 37 billion (R$ 173.8 billion ).

The comparison is inevitable, but Mota says that the idea, at least at the beginning, is not to be a Nubank.

“Nubank is comprehensive, it goes to the base of the pyramid”, he says. “I would say I’m going to be much more comparable to a C6 than a Nubank in the long run.”

Even so, the brand projects Brazil as its fifth largest market. For this, the strategy is not to start by attacking credit, for example, a sector that your main competitor dominates, but to offer other services that the company considers to be different.

The flagship is the global account, which will compete with exchange offices – today the main tool for Brazilians who buy foreign currencies when traveling. Through different wallets for each of the 28 currencies available in the application, the current 6.38% of the IOF (Tax on Financial Operations) drops to 1.1%, as it becomes an international transfer of funds between accounts with the same ownership.

The path is similar to the birth of Revolut in Europe in 2015, when it was just a travel product.

After expanding to countries such as Australia, Japan, Singapore and the United States, the brand arrived in India six months ago and arrives in Brazil at the same time as it lands in Mexico.

Here, Revolut carries the weight of other foreign digital banks that struggle to establish themselves and compete with companies that are already on Brazilians’ cell phones.

For Mota, “there are some advantages in arriving a little later in the market”.

The fact that most Brazilians already have an account in a digital bank, for example, is seen by entrepreneurs as one less barrier to entry. In addition, the brand does not prioritize the exclusivity of account holders.

“It’s okay for the customer to have other banks. I don’t need to be the only one. I need to be what he uses the most or what he likes to use. If, perhaps, he becomes the only one, even better”, he says. “I’d rather have a smaller number of highly satisfied and engaged customers than a much larger base that transacts less.”

Like Nubank, the company invests in reducing bureaucracy and user experience to grow — betting on person-to-person recommendations at the expense of marketing. “This market in which Revolut is stronger, travel and exchange, is still very poorly served in Brazil.”

Despite the challenge of an election year, with a lot of volatility, Mota says it is a good time to enter the Brazilian market. “In regulatory terms, Brazil has an advantage,” he says.