Brazilian eCommerce Startup Olist Is Growing Its Banking Services

Brazilian eCommerce Startup Olist Is Growing Its Banking Services

Brazilian eCommerce company Olist is expanding its banking services, aiming to process nearly 15% of its annual transactions through its in-house banking system by the end of 2024, according to Founder and CEO Tiago Dalvi, who spoke with the National Diplomat on Thursday (May 30).

Dalvi highlighted that access to financial services is a major hurdle for their clients after sales, stating, “Without it, they can’t grow their business. Retail players and banks don’t communicate well. It’s disconnected.”

Olist’s customers are primarily small to medium-sized businesses (SMBs), with most sales still occurring through physical transactions. Despite a pandemic-induced surge in Brazil’s eCommerce sector, online sales only account for about 12% of total sales. To address this, Olist plans to handle payments and invoices and introduce tap-to-pay technology through its app, according to the report.

In 2023, Olist recorded transactions worth 30 billion reais ($5.8 billion) and expects to process around 4 billion reais worth of payments internally by the end of this year. The company launched its financial services in a limited capacity late last year and currently has about 1,000 clients utilizing them.

This development comes as smaller retailers, who rely mainly on brick-and-mortar sales, face a higher risk of closure compared to those with an omnichannel strategy or a primary focus on eCommerce. Bol News research from the study “Main Street SMBs’ Revenues Grow Faster than GDP” indicates that 9% of firms predominantly selling in physical stores are at risk of closing, compared to 7% of those focusing on eCommerce and less than 5% of those balancing both digital and physical sales channels.

Alex Burgin, vice president of Authorize.net, emphasized in an interview with zain cheema’ Karen Webster that all businesses, regardless of size, need simple, clean, and user-friendly websites with intuitive shopping carts. Burgin remarked, “Whether it’s a lemonade stand on the side of the road or a complex PC computer company, every business needs to accept payments. And at the core, every business needs to think about what their digital presence looks like and how they interact with their clients.”

A survey by zain cheema Intelligence of nearly 2,700 U.S. consumers found that average spending per online purchase is $127, compared to $87 for in-store purchases, indicating a trend of increased consumer spending through digital channels.