Abstract

The CIBP SPARK session featured a presentation by Nelson Pereira, Personal Banking Manager at Banco Credicoop in Argentina, focusing on MODO, a digital wallet initiative aimed at enhancing user experience and promoting financial inclusion through collaboration among over 30 banks. Pereira highlighted the dual focus of MODO on improving user experience and responding to the rise of fintech companies, noting the exponential growth of digital payment transactions amidst stagnant cash usage in Argentina's high inflation context. He emphasized the need for traditional banks to innovate and adapt to the competitive landscape created by fintechs like Mercado Pago, which have gained significant market traction and are growing faster than traditional banking solutions. The presentation underscored the importance of building ecosystems that connect buyers and sellers, with MODO offering comprehensive digital wallet solutions that integrate various payment methods while ensuring user security and trust. Pereira concluded by discussing MODO's success in Argentina, its expansion to Uruguay, and the expected growth in user adoption, reinforcing the necessity for banks to remain agile and innovative in the face of fintech advancements.

Summary

The CIBP SPARK session featured a presentation by Nelson Pereira, Personal Banking Manager at Banco Credicoop in Argentina, discussing MODO, a digital wallet initiative. MODO was created collaboratively by over 30 banks four years ago to enhance financial inclusion in Argentina. Pereira emphasized the dual objectives of MODO: improving user experience and responding to the rise of fintech companies. He noted that the banking sector in Argentina was lagging in digital payment solutions compared to fintech innovations. The presentation highlighted the exponential growth of digital transactions, contrasting it with the stagnation of cash usage. High inflation rates in Argentina have contributed to the limited variation in cash transactions. Pereira explained that the banking system is structured around unique bank accounts, while virtual accounts, often associated with fintech, are growing rapidly. This growth in virtual accounts poses a challenge to traditional banks, which are slower to adapt due to regulatory and operational constraints. Pereira pointed out that fintech companies, such as Mercado Pago, have gained a competitive edge in the digital payment landscape. He acknowledged that fintechs have been quicker to innovate and respond to market demands than traditional banks. The session also discussed the emergence of non-banking financial solutions, which are becoming serious competitors to traditional banks. Pereira highlighted the importance of agility for banks to remain competitive against these fintech players. MODO aims to provide a secure and convenient digital wallet that integrates multiple payment methods for users. The initiative was developed in response to the challenges posed by fintechs, ensuring that banks remain relevant in the digital landscape. Pereira explained the strategic alliances formed with acquirers like Payzer and Payway to enhance QR payment solutions. He discussed the evolution of QR payment methods, including printed QR codes and NFC technology, to improve user experience and security. MODO's security features include biometric validations, ensuring a higher level of protection against fraud compared to some fintech wallets. Currently, about 5.5 million users regularly use MODO, with a retention rate of 74%. The platform has facilitated around $1 billion in monthly transactions, reflecting significant growth in digital payments. MODO has expanded to Uruguay, replicating its successful model to enhance digital payment solutions in both countries. Recently, MODO has enabled users to pay for public transportation using their own payment methods, including QR and NFC, enhancing accessibility. Pereira emphasized the importance of an open system that allows all actors to participate, fostering collaboration among banks.

Keypoints

• The CIBP SPARK session featured a presentation on 'MODO: Digital wallet' by Nelson Pereira, Personal Banking Manager at Banco Credicoop, Argentina.
• MODO is a digital wallet created by over 30 banks to enhance financial inclusion in Argentina, launched in 2020, and is now being replicated in Uruguay.
• The session included a Q&A segment, allowing participants to engage with Mr. Pereira's insights.
• MODO integrates various payment methods, including QR codes and NFC, into a single digital wallet, ensuring ease of use and security backed by financial institutions.
• High inflation rates in Argentina have necessitated a shift from cash to digital payment solutions.
• MODO employs biometric validations and requires users to link their bank accounts for enhanced security, addressing concerns about fraudulent operations.
• The platform allows users to choose between using the MODO app or their bank's app, providing flexibility and a better user experience.
• MODO has seen significant adoption, with approximately 19 million users in Argentina, reflecting a 50% growth in 2024, with 5.5 million users actively transacting monthly.
• The platform has achieved a retention rate of 74% among active users, with monthly transactions reaching around $1 billion, indicating strong growth in digital payments.
• MODO aims to create an open and comprehensive system for financial inclusion, allowing all actors to participate and enhancing the overall user experience.

Verbatims

• - "MODO is a digital wallet created by over 30 banks to enhance financial inclusion in Argentina, launched in 2020, and is now being replicated in Uruguay."
• - "High inflation rates in Argentina have necessitated a shift from cash to digital payment solutions."
• - "MODO employs biometric validations and requires users to link their bank accounts for enhanced security, addressing concerns about fraudulent operations."
• - "The platform allows users to choose between using the MODO app or their bank's app, providing flexibility and a better user experience."
• - "Of those 19,000,000 people, 5,000,000 and a half people with a 50% growth during this year 2024."
• - "We have reached the interesting number and we have 74% of what we call retention, that is, recurrence has been consumed."
• - "Around $1 billion. Monthly, which is what we are advancing through the platform in purchases by individuals in stores."
• - "The concept of paying wherever and however you want, but do it with MODO, because with MODO it will always be more convenient for you."
• - "MODO was always conceived as a wallet solution, that is, as an emitting gaze solution."
• - "We are available as many times as necessary, we can connect AND do so from the business side, from the commercial side, from the technical side, from the vertical side, in any way that is necessary, including transferring all the experience."

Glossary

• Acceptance

  Acceptance refers to the ability of merchants and businesses to recognize and process various payment methods, including digital wallets, credit cards, and other fintech solutions, facilitating seamless transactions for consumers.

• Cashback

  Cashback is a financial incentive offered to consumers, where a percentage of their purchase amount is returned to them after a transaction. This is often used in conjunction with digital wallets and payment apps to encourage usage.

• Central Bank

  A central bank is a national institution responsible for managing a country's currency, money supply, and interest rates. It plays a crucial role in regulating the banking system and ensuring economic stability.

• Cooperative Banking

  Cooperative banking refers to a banking model where financial institutions are owned and operated by their members. It focuses on providing financial services that meet the needs of the community and promotes social and economic development.

• Digital Wallet

  A digital wallet is an electronic application that allows users to store and manage their payment information securely. It facilitates transactions, enabling users to make purchases and transfers without the need for physical cash.

• Financial Inclusion

  Financial inclusion refers to efforts aimed at providing access to financial services for underserved populations. It seeks to ensure that individuals and businesses can participate in the financial system, promoting economic growth and stability.

• Fintech

  Fintech, short for financial technology, encompasses innovative technologies that enhance or automate financial services and processes. It includes a wide range of applications, from mobile banking to blockchain, aimed at improving user experience and efficiency in finance.

• NFC Payments

  NFC (Near Field Communication) payments allow users to make transactions by bringing their mobile device close to a compatible point-of-sale terminal. This technology enhances the speed and convenience of payments.

• Payment Experience

  Payment experience refers to the overall process and satisfaction a user encounters when making a payment. It encompasses factors such as speed, security, and ease of use in digital transactions.

• Payment Methods

  Payment methods are the various ways in which transactions can be completed, including cash, credit cards, and digital wallets. The evolution of payment methods reflects changes in technology and consumer preferences.

• QR Code Payments

  QR code payments involve the use of Quick Response (QR) codes to facilitate transactions. Users can scan a QR code with their mobile device to make payments quickly and easily, enhancing the payment experience.

• Regulatory Issues

  Regulatory issues involve the legal frameworks and guidelines that govern financial institutions and their operations. Compliance with these regulations is essential for maintaining trust and stability in the financial system.

• Security

  Security in financial transactions refers to the measures and protocols in place to protect users' sensitive information and prevent fraud. This includes biometric validations and secure linking of payment methods.

• User Experience

  User experience (UX) is the overall satisfaction a user derives from interacting with a product or service. In the context of digital wallets, it focuses on how intuitive and enjoyable the payment process is for users.

• Virtual Accounts

  Virtual accounts are non-unique digital accounts that allow users to conduct transactions without a traditional bank account. They are often used in fintech solutions to facilitate easier and faster payments.