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Leaders In Payments
Leaders In Payments
Francisco Leon, CEO of Bamboo Payment Systems | Episode 279
What if you knew the secrets of the rapidly evolving payments and fintech landscape in Latin America? Cue Francisco León, the CEO of Bamboo Payment Systems. With a wealth of experience in finance and risk management, he shares his journey of leading a company that bridges the gap between international businesses and Latin American consumers. Bamboo Payment Systems is making strides in the payment processing industry by focusing on various sectors like gaming, ride-hailing, and streaming services. Their USP? Real-time payments and leveraging local payment methods.
We dig into the rise of local payment methods, their challenges, and the potential tremors crypto and blockchain could cause in the region. But it's not all business - Francisco gives us a glimpse into his world outside work, from kickboxing to balancing family life. His advice for those looking to carve a career in payments? Flexibility and adaptability are key. So strap in and get ready for a whirlwind tour of Latin America's dynamic payments industry.
Welcome to the Leaders in Payments podcast, where we talk to C-level leaders from across the payments landscape. We'll be discussing the products and services that impact the payment space today, as well as trends and predictions for the future of payments. We will also hear stories from our guests about their journeys to the top.
Speaker 2:What we are providing to the merchant is just one way to sell, so the merchant doesn't have to worry about that. This is a QR payment, or this is an A to A transaction, or this is a digital wallet. We are going to standardize in a certain way that part, and we are going to make easier for the merchant to capture that sale and only to capture the value of the market.
Speaker 3:That was Francisco León, the CEO of Bamboo Payments, and he is my special guest on this episode, episode 279 of the Leaders in Payments podcast, and I'm your host, greg Myers. Bamboo Payments is a leading online payments processor offering diverse pay in and pay out solutions for international merchants operating in Latin America. Francisco and I talk about the company, what makes them unique in the marketplace and how they help e-commerce companies take advantage of local currencies in Latin America. Francisco has a passion for payments, fintech, his family, kickboxing and soccer. We've got a great episode ahead, so let's get started. Hi, francisco, thank you for being here and welcome to the Leaders in Payments podcast.
Speaker 2:Hi, greg, thanks for having me, and always a pleasure to talk about payments.
Speaker 3:Yes, thank you so much. If you don't mind, let's just dive right in. Could you tell our audience a little bit about yourself, maybe where you grew up, where you went to school, where you currently live, a few things like that?
Speaker 2:I'm a Colombian guy. I grew up in Bogota, in the capital city of Colombia. I studied finance and I was very specialized about risk management and this is what I did in the beginning of my career. Then everything started changing with digital payments and the digital industry. So I was taking a lot of programs about payments, fintech, everything across the world in different situations across the world. So I had the privilege to share ideas with a lot of people across the world about payments and fintech.
Speaker 2:I got back and tried to make a chart in trouble about myself. So everything started with the banks, with the financial industry, with the very traditional financial industry. So I was working around 10 years for the banking sector. There I was basically doing risk management, credit collection. So all those kind of stuff are very related with my academic career. But always there was an interest to mix also those functions with innovation projects. So let's say, biometrics projects in 2009 or OCR technologies in 2012, or data scientists with machine learning programs in 2013. So always I was having that function, that very risk manager, risk director guy in the bank. I always combined that with different projects that I received and I was able to participate on those projects of innovation.
Speaker 2:Then I left the bank because I was following more entrepreneurial, so I was thinking more about digital industry at that time. I was not thinking about digital payments, it was more e-commerce, online stores, digital strategy. I had three years that creating and funding fear companies that those companies still exist. But I am not fully involved now in those companies. And in 2017 I received the opportunity to join PAYO One.
Speaker 2:It was my first direct contact with payments and I was six years. In the first three years it was more about what I knew at that time, so finance risk management but the last three years I was the CEO of the company in Latam. Fortunately, we had really good results During those three years we tripled the size of the company in the region and we were able to really put the company as one of the top companies top payments company for Latam. And then, early this year, I was ready to take another challenge and then bamboo payment appeared and I was looking for something where I can be part of the new revolution and the new velocity that we need to make in the payment ecosystem. So basically, this is more or less a bit my intro.
Speaker 3:Well, let's go ahead and talk about the company. So tell our audience what bamboo does.
Speaker 2:So bamboo is a payment company.
Speaker 2:It's payback, as generally speaking, people refers to our companies, but basically what we want to do is to connect international or global businesses with Latin American consumers.
Speaker 2:So we know that there is a big, big opportunity there. So we offer paying and payout solutions that basically paying is the collection of payments and payouts is the other way around, this version of those payments, and what we do is we collect those payments for international companies in Latin America in local payment methods and we transfer that money outside of Latin America. So everywhere the merchant wants we can make the settlement outside, or we can do the other way around and we receive that money in the US or in Europe and we can disbord that money in local currency in Latin America in local bank accounts. So we are a payment platform, so we are a tech based company, so we are proprietary of our technology. So we were building that technology during the last few years and what we want to do is to be the best real time payments, in a way, in Latin America. So this is more or less what bamboo does.
Speaker 3:Are there certain industries or verticals that you focus on more than others?
Speaker 2:Yes, we already started with some big merchants in the gaming industry and also in the ride-hailing industry and where we see big opportunities for the local instant payment methods that I can explain a bit later. But we see big opportunities in gaming, in payroll companies that now are very popular across the world, streaming services, for sure, and also ecosystem. This is evolving very fast and we are making good progress on the specific use cases.
Speaker 3:Okay, and what would you say? Differentiates your company from your competitors out there?
Speaker 2:I think we are entering in the second phase of the cross-border payments. The first phase was very based on traditional payment methods like credit and debit cards, and their international merchants were able to process and to capture part of the value of the Latin American market. And now we are moving to the second phase where local instant payment methods that is, basically QR payments, account to account instantly, e-wallets or digital wallets and all those government instant systems that are very popular now in the region. Now those payment methods are taking the lead in the region and this is going to be probably the most important payment methods in the following years. So what differentiates us is that we focus on that part. Even then, we already have also credit cards and debit cards as payment methods. We are very specialized and we are very focused on developing the best user experience and the best conversion rates for local alternative payment methods. That is what I just mentioned.
Speaker 3:A typical way people would do business in the past is they would just be doing regular cross-border payments into your regions or they would have to set up a company there. So you've kind of replaced part of that. Is that sort of the right way to look at it?
Speaker 2:Exactly, and I think this is really important, because let's think that one US company wants to expand their operation in Latin America, but they don't want to open a new company country by country. They don't want to deal with all the different and very fragmented regions, because Latin America is a very fragmented region. If they connect with us, basically we can replace everything. We are going to act as a merchant of record, so in the end, they don't need to have a local entity in each country and we are going to make everything with the local payment methods, so in the end, they don't need to make any administrative thing. This is going to be on us and we are going to provide all the payment methods in the region.
Speaker 3:In Latin America. Do you see sort of the same fraud challenges that we have in the US and UK, and is that part of your process, as well as having a robust fraud solution?
Speaker 2:Yes, but one good thing that real times or these local payment methods are. The validation or the identification of the users are going to be part of what the payment method is going to provide. So in the end, there is no fraud, there is no charge back in those payment methods and it is instantly, so the authorization is instant and merchants are not going to carry with high charge back or high fraud in those payment methods. So this is another advantage to also to enable those local payment methods.
Speaker 3:That's great. That makes a lot of sense. Well, where do you see the payments industry headed, say, in the next maybe three to five years?
Speaker 2:So today, when we analyze the whole pie of payment methods and they share that we have of payment methods and we group what I call local instant payment methods, those local instant payment methods are having a share of 40% of the total commerce in the region. But when we talk about a cross border payment so cross border merchants that don't have local entities in the region but they are processing and they are capturing payments in the video this is going to be maybe 5% to 10%. And why it is happening? Because the local instant payment methods were born for peer-to-peer transactions and now this is transforming to peer-to-merch and peer-to-commerce transactions and in these cases Web Banboo is working a lot. So we are developing different solutions and this is going to help also to transform that chair of the cross-border payment.
Speaker 2:So how I envision the following I don't know, maybe 2 years max is that those local instant payment methods are going to be the most relevant in each country in the region. This is already validated by the payment methods like PIX in Brazil that this is a big revolution in the world. I think this is the best success case of different and local instant payment methods and now with that payment method you can make also cross-border payments. You can also add we are doing that. We are offering PIX in Uruguay, we are going to offer PIX also in Argentina. So it means that a Brazilian guy can buy any product or any service in different countries across the world. So I think the big change that we are going to see in the following years is that those local payment methods are going to be the most important part to grow business in Latin America.
Speaker 3:And those local payment methods that you're talking about, just to make sure I understand. So they're all built around real-time payments and their legacy was really just peer-to-peer, but now they've expanded to where consumers can pay businesses using that same payment method. Did I get that right?
Speaker 2:Exactly. What is maybe the biggest challenge of those local payment methods is that when you think country by country, you are going to find I don't know 10 or 12 popular local payment methods. And if you think that now you want to expand your operation in seven or 10 countries, so you need to multiply that for the number of local payment methods. And all those payment methods work differently, so they don't have the same user experience or you cannot, let's say, talk that it is going to work in the same way. What we are doing, we are simplifying that for the merchant, so it doesn't matter that the interaction with the consumer is different. What we are providing to the merchant is just one way to sell, so the merchant doesn't have to worry about that. This is a QR payment or this is an A to A transaction or this is a digital wallet. We are going to standardize in a certain way, that part and we are going to make easier for the merchant to capture that sale and only to capture the value of the market.
Speaker 3:That makes a lot of sense Are things like crypto and blockchain. Are you seeing any movement in that in Latin America, or has that kind of been put off to the side for a while?
Speaker 2:What we see is crypto is passing through a very complex time, but in general, the blockchain technology and crypto is a really good solution and also follow the same concepts that I just talked about. This is constantly cost effective, so it is going to take again relevance and this is not out of our roadmap. So we are talking with a lot of crypto companies in this moment to partner and also it is going to simplify a lot the international settlements. So the technology in general is great. What is happening now is that we have to be cautious about how to implement and how to follow, how to include those payment methods in our offering. But this is something that from our side, we think that it was validated, it is good and it is going to be part of the future of the payments in the world, great.
Speaker 3:Well, let's switch gears a little bit and talk about you, and you kind of gave us an overview of your professional history. But maybe the question is, why did you pick bamboo? You had the opportunity to come there as the CEO. Why did you choose that company?
Speaker 2:It is about velocity. I think part of my decision is based on why is going to be the speed that we have to transform digital payments. We have very good companies across the world, but now markets are moving faster than companies and one important decision point for me was where I can move fast, where I can add more value to that velocity and to really capture the market. Because the market is moving fast and if the payments companies are not going to move in the same Speed, so we are going to lose the opportunity to capture the market and to create value around that. So this is basically why I choose bamboo and I'm completely happy, and now, after seven months in the company, so we are having a good velocity to develop different things. We have Flexibility. We are building really important topics for the region what are some things you're passionate about?
Speaker 3:so maybe one business related passion and one personal passion.
Speaker 2:I love to Talk about FinTech and about payments, so I read a lot and I used to watch videos or listen podcast, trying to be updated about what is happening in the digital Payments industry. So this is part of one big passion and when I have time, I try to invest my time there reading or watching or listening something, and On the other side, always with a lot of things happening, we used to be very busy all the time. So I try to make sure that I have time for my family and try to have this time with my wife and my daughter. So this is really important and anyway, we need to find time for everything. So also I enjoy kickboxing, so I try to train at least three times a week and Also I'm a big soccer fan. So trying to combine everything because we need to find time for everything.
Speaker 3:Well, you may be the first CEO that I've interviewed that also does kickboxing, so that's interesting. I've had some that play ping pong or table tennis, I've had surfers, I've had Pilots you name it but kickboxing I think you're the first one, so that's cool. I always like to ask this question because I think everyone brings their kind of own unique experience to this. But someone comes to you and they say, hey, I'm interested in starting a career in payments or fintech and maybe it's someone that's interviewing there at your company and they say, hey, you know, I want to build my career in this space because it's such a Dynamic, growing, hot space to be in. What advice would you give them to be successful in this industry?
Speaker 2:one important topic is to be flexible and To avoid that frustration is going to be something that is going to stop them. So Frustration is something that happened all the time and you need to keep going to next day is a new day. So flexibility and that capacity of surpass the frustration I think this is important. But about the industry itself. So we need to think that everything from now To the future is going to be new. So part of what we talk when we talk with the team in bamboo, we have very talented people with a lot of experience in payments, but part of that experience sometimes play against. So what we need to consider, that experience is going to help us to avoid Making the same mistakes. But this is not going to build the future of payment, because the future of payments is going to be different than the Past three years of payments.
Speaker 3:Francisco. We've covered a lot of ground so far, obviously, about you and your background in the company, in the industry. Is there anything else you'd like to add before we wrap up the show? No great.
Speaker 2:Thanks for inviting me and it was great to talk to you and invite everyone to keep Learning and building and creating about payments.
Speaker 3:Okay Well, francisco, thank you so much for being on the show today. I know your time is very valuable, so I really appreciate you being here. Thanks, rick, and to all you listeners out there, I thank you for your time as well, and until the next story.
Speaker 1:Thank you for joining us this week on the leaders in payments podcast. Make sure you visit our website at leaders in payments calm, where you can subscribe to the show and where you'll find our show notes. If you enjoyed listening, please share on your social channels as well.