MIAMI, (October 5, 2020) - Visa today released its second study on innovation, Innovation Rising in Latin America: Lessons from Innovative Leaders Across the Region, a report detailing the progress, indicators, trends and benchmarks of the most innovative companies in Latin America and the Caribbean. Just sixteen months since Visa’s first State of Innovation report came out (March 2019), the new study reveals a 24% increase in Advanced and Mature/Born Innovative companies and that the Covid-19 pandemic has helped fuel the trend in the region.
Brazil has emerged as the clear leader, accounting for 43% of the most innovative companies, but strong examples can be found across the region, including in smaller markets like Costa Rica and Uruguay. Conducted by Americas Market Intelligence (AMI), more than 100 companies in 10 Latin American and Caribbean markets were tracked and assessed according to five pillars of innovation: Internal Support for Innovation, External Collaboration, Execution, Use of Technology, and Impact and Scale.
“At Visa we are keenly aware of the connection between consumer experience and innovation in Latin America and the Caribbean,” said Vanesa Meyer, head of Innovation and Design at Visa Latin America.” Through our study of the most innovative companies, it is evident that we are moving into a new era in which the lines between companies are blurring: to move forward, companies must become platforms, not just institutions. Seamless, instantaneous, and interoperable payments are becoming a reality in the region, with commerce taking place anywhere and everywhere.”
The Innovation Rising in Latin America study reveals that despite the size, industry and digital vs. brick-and-mortar, payments’ trailblazers have three things in common:
1. An innovative spirit with a true desire to improve consumers’ lives. The top innovative companies introduce products that improve consumers’ lives; their focus is on creating added value and solving pain-points before anyone else. Top innovators not only come up with great ideas but turn them into viable products and features rapidly.
• 60% of respondents have a dedicated innovation team, whereas 89% of top innovators have innovation built into their organization’s business model itself
• More than 70% of top innovators’ teams use agile methodology to expedite the improvement and development of products and services
• Top innovators launched 39% more proofs of concept to market, an average of 17 new products per year
2. Use APIs and advanced technologies widely. Top innovators use APIs nearly more than twice than other entities in the sample; they also make clever use of biometrics, tokenization, artificial intelligence (AI), machine learning and IoT to make invisible, frictionless, commerce experiences happen.
• The most innovative companies have an average of 89 external or open APIs (three times the overall sample); financial institutions experienced the greatest leap in the use of APIs – 182% increase since the first study
• 77% of most innovative companies are using biometrics; 44% more companies are using AI since previous study
3. Top innovators are more willing to partner with fintech and startups to evolve their offerings. The most innovative companies are accessing expertise and capabilities outside of their realm, through partnerships.
• Top innovators formed 50% more partnerships than their peers in the study; the top 30 average 16 partnerships
• 50% of the top innovators invested in startups versus 38% of the total sample; 40% had incubation/acceleration programs versus 28% of the total sample; 90% formed commercial partnerships with startups versus 75% of the total sample
Empowered by agile working structures, cloud-based internal systems, and a mindset that asked the question ‘How can we help’, rather than ‘How will we survive?’, the insights unveiled that innovative companies rallied quickly to help their customers. "Overall, companies that were already on the fast lane to digitization and payments innovation were better positioned to react swiftly and effectively to consumer needs during Covid-19," added Meyer.
Covid-19 an Important Catalyst in Region’s Commerce Innovation
A separate Visa study affirms the role of Covid-191, which may be the most powerful force for digitization Latin America and the Caribbean have ever experienced. Three major trends emerged in this new study; the second wave of Visa’s Latin America Covid-19 Consumer Sentiment Report released in July:
1. Personal finances are tight, but consumers prioritize experiences, relationships. Half of consumers express their finances have suffered during the pandemic, which is causing them to reassess the value of things and realize the importance of health, experiences and relationships. They are favoring the purchase of basic needs: protective gear (58%), streaming services (55%), home cleaning products (49%), hygiene/beauty/care (41%), and groceries (37%).
2. Consumers expect and are adopting alternative forms of payment over cash. The pandemic triggered an acceleration in the adoption of cashless solutions with nearly 70% of consumers using cash less than before. 54% of respondents say they have used their cards more during the pandemic and they plan to continue using them as much in the future. eCommerce became one of the only channels available to access many goods and services. Visa reported that in Brazil, active eCommerce credentials increased 11% while spend per active credential increased 12%; and in markets where eCommerce is not as developed like Argentina, there were dramatic changes in adoption with active eCommerce card growth of over 100% . Additionally, innovative issuers began offering banking services via WhatsApp, increasing online account registrations and virtual card transactions, all demonstrating consumers’ willingness to adopt digitization.
3. Social shopping: The pandemic also triggered a surge of innovative ways to buy and pay through social media platforms. 82% of consumers have seen innovative ways to purchase products and services, with more than 80% saying that they would like to use WhatsApp as an alternative payment method. An innovative company in the merchant category, for example, enabled a mobile sales functionality on WhatsApp to its remote workforce, significantly boosting eCommerce sales.
"Innovative companies put enhancing value to the customer above all else. At the same time, they are recognizing and capitalizing on the opportunities and unmet demand that the pandemic has presented in our region," concluded Meyer.
About Visa Inc.
Visa Inc. (NYSE: V) is the world’s leader in digital payments. Our mission is to connect the world through the most innovative, reliable and secure payment network - enabling individuals, businesses and economies to thrive. Our advanced global processing network, VisaNet, provides secure and reliable payments around the world, and is capable of handling more than 65,000 transaction messages a second. The company’s relentless focus on innovation is a catalyst for the rapid growth of digital commerce on any device for everyone, everywhere. As the world moves from analog to digital, Visa is applying our brand, products, people, network and scale to reshape the future of commerce. For more information, visit About Visa, visa.com/blog and @VisaNews .