➤ The global payments company is investing in its prepaid digital consumer business and local payments markets throughout Latin America.

➤ Ebanx is analyzing about 300 companies for M&A opportunities in emerging markets to broaden its reach.

➤ An IPO in the U.S. is ahead for the company, although timing has yet to be determined.

The difficulty of doing business in Brazil is a well-known barrier. It has also helped birth unicorns like Ebanx SA, founded 10 years ago to facilitate cross-border payments for international companies wanting to sell to Brazilians.

Today, Ebanx counts among its clients AliExpress, Uber, Airbnb and Spotify and has expanded into highly competitive local payments, as well as offering a prepaid service for consumers. It is present in 15 countries and counting and has picked up a few companies along the way, as well as a 30% share in the digital bank Banco Topázio SA.

Ebanx is smack dab in the middle of the payments map, linking businesses, banks and customers and bypassing local and often quirky financial systems that leave foreigners scratching their heads.

Co-founder and Chief Risk Officer Wagner Ruiz spoke to S&P Global Market Intelligence about the company's future, industry trends and optimism for the notoriously complex Latin American markets. The following is an edited transcript of the conversation.

S&P Global Market Intelligence: Is this the moment for payments in Latin America? Has the environment for doing business in Latin America improved?

Wagner Ruiz: Things have changed, but it's still a very difficult region to do business. One of the reasons for Ebanx's existence is exactly that. It's much better than 10 years ago, but it's not perfect, and it creates opportunities for big entrepreneurs and startups.

Doing business has improved because of mobile phones, digitalization and higher income. You can see that with Pix [Brazil's central bank-sponsored digital payments system], where you see volume that didn't exist before. This is happening across the region. Big players in countries that aren't growing much anymore will look at us again. This is also thanks to a revolution in regulations in all of the countries.

All governments have realized that it's preferable not to have public money incentivizing the economy. To attract private money, you need to create the right legal framework. What I've seen in the past two or three years in all of the countries is governments trying to improve legal frameworks so that private initiatives can have an opportunity to do business and also finance the economy.

How has Pix impacted the business? And what do you think could be the impact of Pix Credit?

Pix brought out repressed demand that we didn't know existed that seems to come from cash. It did take a very small part of our debit card business. It's a revolution reaching the underbanked.

Today, you need to have money in the bank to make a Pix purchase. If you have the issuer giving credit, it can become Pix Credit. The same banks will continue to provide credit, but it opens the market. In general, Pix Credit may influence less the credit players and more the payment networks.

What are some of the current trends in the industry?

Buy Now Pay Later is the next big thing. Everyone is going after it. It could be a cultural revolution.

Financing in the U.S. and Europe has always been between the user and the bank. Because of inflation and culture, years ago Latin America created something only possible here with no-interest installments. A big part of our challenge in the U.S. was explaining how installments work here, where the focus is on financing retailers. This created a concentration of banks that have a relationship directly with the retailer.

[Buy Now Pay Later, or BNPL] opens the possibility for small investors or small companies to become direct credit companies, a fintech model that allows for digital lending, and to provide much cheaper credit.

Deep down, BNPL is the same as installments but it's already opening the market for other kinds of financing and business models. The difference is who is doing the financing and what they are charging. It may not be a bank, though big banks will enter into this.

BNPL is another payment method, and we want to have all of them. Whether we are interested in doing it in-house or not, today credit isn't part of our focus but doing it through a partnership with a third party makes sense. Without a doubt, the moment there's an opportunity we're going to get in. I've already been approached by big banks that want to do this, that want to use our platform. We haven't yet defined how we'll offer this.

How does the competitive landscape look?

Who are our competitors? We have small stakes in markets like local payments, which in Brazil is super competitive, margins are squeezed. If talking purely payment institutions, I have many rivals, but maybe none that also does global payments. I don't consider them my competitors. The gamut of services is different. We do have a rival in cross-border, DLocal Ltd., but they don't do local.

What's your relationship with banks like?

We're very close to the banks. We fought a lot with all of them at first. Today it's very clear what we do, and I work closely with banks, card networks and payment methods. Even though we have a consumer business, we're not going to compete with Itaú. We're going into areas that they aren't. We are complementary to banks. We don't want to be a bank, we don't want to hold a user's assets, but we do want to provide services where we see difficulties.

We did want to have a history in the industry, so we bought 30% of [Banco Topázio] because it is a fundamental part of our business.

What are your expansion plans, including M&A and an IPO?

We look at everything but always focus on our three core areas. M&A is a way to accelerate our growth. We have to be careful with the target. We need to make sure there is a cultural fit and a strategic fit.

We may see big growth geographically in emerging markets. We're looking actively at companies outside of Brazil, including infrastructure assets. If I told you we have 300 companies under analysis, I wouldn't be lying.

The official response to the IPO questions is: "We don't comment on this issue." But I'll tell you in general what I think. The question of going public is natural — that's part of all companies. It's always a question of what's the correct moment for the company and the market.

Why are Brazilian companies listing in the U.S. rather than in Brazil?

The liquidity is much higher, and at the levels of valuation we see you have to be in a place with more liquidity. For fintech and payments, New York makes sense because investors know the industry better. In our case, it would make sense because of liquidity and because we are more of a global company than a Brazilian one.