PagPop can take credit for growing Brazil’s entrepreneur economy.
By: Lianna Patch
Here’s a lesson in Startups 101: The best startups aim to solve a problem. The more people affected by that problem, the more likely it is that the startup will succeed.
So when dentist Marcio Campos realized that Brazilian small businesses lacked an easy way to accept credit card payments, he saw an opportunity to fill more than just cavities.
“In Brazil, 40% of the economically active population either does not have a bank account, or has a substandard bank account,” Campos explains. In his case, this meant that his patients often defaulted on payments for their dental work — or they were simply unable to pay for work that they needed.
Instead of going after non-paying customers, Campos decided to make it easier for Brazilians to make money. “This mass of people, which is ruled out of the mainstream financial system, operates microbusinesses that create revenue,” Campos says. But, because these small-business owners are unable to accept credit card payments, they miss out on a number of sales — potentially trapping them in lower economic classes, and stalling their businesses’ potential for growth.
“I came from a lower-middle-class family; I know how difficult it is for some people to have their voices heard by the mainstream financial system,” Campos says.
From Teeth to Tech
In 2012, Campos launched PagPop, a payment processing company that allows small-business owners and independent professionals to accept credit and debit card payments through their cell phones or through PagPop’s online platform. The app is available for iOS and Android; customers can also access PagPop services through a landline connection.
By fall 2012, Intel had selected PagPop as one of the 10 companies into which it would invest a total of $40 million.
Having set itself up as the merchant provider of choice for nearly 150,000 Brazilians, PagPop is rapidly becoming the Brazilian equivalent of Square, a popular card-processing service based in the U.S. “We started in 2012 with 3,000 users, and in a couple of years, we grew 5,000% to 150,000 users,” Campos says proudly. And he’s not stopping there. “There are 20 million potential PagPop customers in Brazil,” he says. “Our goal is to have 500,000 users by 2017.”
The service sets itself apart through its dedication to serving its customers, first and foremost. “PagPop is not about hardware,” Campos says. “It’s about a business strategy that understands the needs of a microbusiness and caters to [those needs].” He notes that along with empowering users to accept cards, PagPop helps users organize their records. Some users have gotten as far as obtaining business tax ID numbers to legitimize their growing businesses.
Savvy Startup Star
Campos knows exactly where PagPop is heading — and though he admits he’s not a “tech geek,” he’s always been business-minded. “I started my first business when I was 8 years old,” he shares. “I had four bearings, and my next-door neighbor had a wood box; we put our resources together to build a wagon.” The kids headed to the local fresh market to haul groceries for women there. “We split the revenue. I would get 60%, because, as I used to say, the wheels would not be turning without the bearings.”
Since its inception, the company’s goal has been to move beyond city limits to reach customers in rural areas, where banking access is even rarer. “We are marketing PagPop beyond the big cities in Brazil, to very small places such as Nova Iorque, in the state of Maranhão,” Campos says. “We have a network of customers in every region of the country.”
Asked whether Campos would accept a buyout to the tune of $20 million right now, Campos answers confidently. “Indeed, $20 million is a lot of money — but I would not take it,” he says. He first foresees exploring PagPop’s many other potential revenue streams, and reveals that the company will soon be entering its second round of fundraising.
Lianna Patch is a writer and editor from New Orleans, LA, whose portfolio spans copywriting, cultural publications, and literary journals.