Pix, the instant payment system developed by the Central Bank of Brazil, has been a huge success.
With Pix, money is transferred directly between the central banking systems of various financial institutions. Adoption of this system has been widespread and is present everywhere. Residents of the country can even make payments to street vendors using their mobile wallets. Earlier this year, the company launched Pix. estimated that Pix would be used by approximately 153 million Brazilian citizens (about 75% of the population) and 15 million companies.
The success of Pix has led to an increase in demand for assistive technology from businesses. A prominent case in point is MateraMatera, a Brazilian company that provides instant payment services, QR code payments, and core banking software to financial institutions. Matera provides software to authorized banks and payment institutions to facilitate the sending and receiving of Pix, alias assignment, QR code generation, and other functions related to the Pix system.
Every time a transaction via the Pix system replaces a credit card transaction, not only do the major payment networks lose market share, but companies that help drive instant bank payments, such as Matera, increase their market share.
Pix was implemented in Brazil in 2020, which has been beneficial to Matera's development. According to Matera, the company has experienced four-fold growth since then and has achieved a 30% increase in revenue, which amounted to $77 million by 2023. It is rare for a company founded in 1987 to experience such accelerated growth so many years after its establishment.
And Matera has now announced that it has secured a $100 million investment from Warburg Pincus, giving the private equity firm a majority stake in the company, it said.
Matera is a company that is similar to FIS, Fiserv, and Jack & Henry, core banking service providers in the United States, and is currently looking to expand into North America. It is important to note that Matera does not provide its core banking service in North American markets, as there are several traditional operators that do. However, its focus is on providing QR code and digital twin payment solutions in North America.
“These solutions help develop a more agile operating model for financial institutions, improving the core banking system without replacing it,” said Carlos Netto, CEO and co-founder of Matera. “Matera looks forward to helping the United States match Brazil in terms of instant payments, while remaining convinced that simplifying legacy systems is the primary goal.”
The decision to accept an investment from Warburg Pincus was made with the aim of having an American partner that would facilitate navigation and access to the US market, according to Matera.
The United States government's instant payment system, known as FedNow Service, was implemented about a year ago and has experienced some delay in widespread adoption.
Matera says it processes approximately 500 million Pix transactions per month, and thanks to a recently signed agreement, this number is expected to soon reach 1.000 billion per month. The company has around 280 clients, including two of the top three global banks, three of the top 10 US banks, and one-third of all banking institutions in Brazil. Since its inception, the company's business model has been based on a subscription system. Subscription fees are often variable, depending on factors such as the number of accounts, Pix transactions, and loan agreements.
Matera currently has 1,100 employees, compared to 900 the previous year.
Henrique Muramoto, CEO of Warburg Pincus, said his company has been monitoring Matera since Pix was introduced in Brazil.
“When it comes to having an advanced payment infrastructure, Brazil stands out as a pioneer country,” he said in an interview. “In the context of Brazil, Matera has been a leader in offering solutions to operate within this infrastructure.”
