He is from Montevideo and is 52 years old. After graduating as a systems analyst, he was a teacher and worked for a US consultancy firm with which he travelled practically all over Latin America. On his return, he led the technological restructuring of Banco República and then joined the ITC consultancy firm that worked with Antel. Since 2009 he has led IN Switch, a company that stood out for launching the first electronic wallet in the unbanked sector that allowed international money transfers from mobile phones. His solutions for the telecommunications and financial sectors reached 44 countries and Perea expects his e-wallet product to be 70% of the firm's business in two years. He is married, has three children and enjoys spending time with his family.
How did it come to IN Switch?
I arrived in 2009. I think my background gave me the necessary knowledge of the firm's three main sectors: finance, telecommunications and government. I spent nine years in an American consulting firm with which I travelled to several Latin American countries and was able to observe how transformations are made in public and private organisations. Then, between 1995 and 2000, I led the technological restructuring of Banco República. After that, I joined ITC (Antel's consulting firm), first as a senior consultant, then as a manager.
What are the firm's main lines of business?
One has to do with all the support to telecommunications companies, with electronic top-ups, customer services and management, package sales, mobile broadband. Mainly, what we do is collection and value-added. We started with small companies, but we already work with all operators in the region. The other sector is mobile financial services (which includes e-wallets). Today the proportion of turnover is 70% in the former and 30% in the latter, but in two years' time it will be reversed and mobile financial services will be 70%.
Your e-wallet stands out because you don't have to have a bank account to use it, so how does it work?
E-money is held in trust in a financial institution and, when a transaction is made, it is passed from one user to another automatically. Wallets can be loaded either with a bank account or in the same way as a mobile phone, in the same places. Another feature is that they are "viral". For example, money can be passed to a person who has neither an e-wallet nor a bank account. When the sender makes the transfer from the wallet on the mobile phone, he or she enters the amount, the ID card number and the mobile phone number of the receiver. The recipient receives an SMS saying that the mobile phone passed him/her an amount of money and gives him/her an identifier number for the transaction. Then, he/she can cash the money at the charging points by presenting the ID card and the identification number, or at the moment of receiving the message, register (to obtain an e-wallet) by following the steps and questions.
How does it differ from other similar proposals?
That it is multichannel. I can have several wallets and store funds in each one without associating payment methods and it works on any mobile phone without the need for internet or credit. It is possible because we use the USSD (Unstructured Supplementary Unstructured Data Service) cellular network, you navigate through menus that use the channel that is used to ring the mobile phone. For example, in the supermarket, after passing the items, the cashier is told that the payment method is the electronic wallet, she asks for the mobile phone number and enters the amount, and at that moment a USSD push appears on the user's mobile phone asking for confirmation of the expenditure in that supermarket. The user gives OK, enters the personal password and that's it. It is faster than swiping a card.
The first customer of your e-wallet was Tigo in Paraguay, how is that market doing?
With them we implemented the first e-wallet in Latin America in 2009. After that, two more operators bought us and now we are closing negotiations with the fourth, which means that 100% of mobile phones in Paraguay will have our e-wallet solution. As of last December, more than 1.7 million accounts were enabled for money transfers. According to the country's Superintendencia de Bancos (SIB), some US$ 570 million in transactions were made through the platform, which means that 10% of payments are made by mobile means.
If you work with all companies, how do you handle exclusivity or privacy?
We don't give exclusivity to anyone. What we do are agreements not to do the same thing with other companies for a period of six months or a year. But since we solve general situations, quite a lot of the companies' core business and we are constantly evolving, if the players want to be up to date with this, they have to implement the technology. Many times those who recommend us to clients are the competition because they claim that together they can generate a policy of using and getting the public used to the technology. This can even help to implement country policies, as with the e-wallet. There is a time to differentiate and a time to go the same way. We never aim for total exclusivity because sooner or later the competition will do it, with us or with others.
Perea. "Technology enables changes in how financial needs are handled. (Photo: Marcelo Bonjour)
Last year you implemented the wallet with the government of Ecuador, what did this project represent for the company?
This is the first time a government has said it will use technology to provide a uniform solution for the entire population, including the unbanked. Now all operators must provide the communication so that it works for free in any company and through any mobile phone, in any shop and bank. But this is not a replicable situation for any country. The project had its problems, but in order to increase its use, the government decided to reduce VAT on payments made by this means from 14% to 10%. This year we recorded a month-on-month growth of 40%. Cooperatives and microcredits will now be added.
How could these financial solutions be massively implemented?
Often what we see is that the type of technological solutions for the financial sector are an issue that countries should define with public policies because they increase financial inclusion, lower the costs of financial intermediation and increase citizen security.
Today, technology is enabling change in the way citizens' financial needs and the use of money are handled. Until now, governments have been reluctant to lead such projects, leaving the financial sector to serve only the segment of the population that is attractive to them. The company has worked with the financial and telecommunications sectors to learn from both and innovate, to help governments implement these changes in their public policies.
What is the company's innovation process like?
At the beginning we were concern-takers, but after being nurtured by customers, we now also propose ideas on problems. Our big innovation is in e-money. We were the first e-wallet in the unbanked sector to allow international money transfers from mobile phones. For example, a person in one city can pass money to their family in another place regardless of the amount. We also use a lot of big data, analytics and predictive and with that we know what is happening, who the customers are and what to offer them. For example, we have a feature called "overdraft" in electronic payment. If at the time of payment with the e-wallet the balance is not given, we "see" if the person has a correct risk rating at the time of purchase and if so, we offer an overdraft by simply giving OK. And in telecommunications, for example, if someone runs out of credit while surfing the internet, we make them an offer for a data package and we know, based on their behaviour, which one they need.
Why haven't you developed the e-wallet in Uruguay?
Because there is still a lot to work on. An important issue is interoperability, that the different payment instruments transfer electronic money between each other, between them and bank accounts, and are accepted at merchants. In Uruguay, transfers between bank accounts have been solved, but there is still a need. For example, to guarantee the neutrality of the networks, i.e. that any electronic wallet authorised by the Central Bank can be used in the POS and ATM networks and have access to the different technologies of the telecommunications operators. The POS network is in its possession thanks to the regulation of the Financial Inclusion Law (it cannot deny service to electronic money instruments). Nor was neutrality in telecommunications networks defined; today, telcos can deny access to another company's electronic payment service technology. And non-discrimination must be ensured, that charging in the networks is equal for any payment instrument. On the other hand, it is difficult for us to be on both sides of the counter, to be the technological implementers of banks, means of payment and so on, and to compete with them. So we prefer to be on the side of the implementer and technology partner.
How many people work in the company?
We are about 100 people in the company. We have offices in eight countries besides Uruguay (USA, Brazil, Paraguay, Costa Rica, El Salvador, Guatemala, Colombia and Ecuador) with local people to serve them commercially and in some cases with technical support. All the development and customer service we have in 44 countries is done from Montevideo. Ninety-nine per cent are from Latin America and the Caribbean. We have two in Africa (Ghana and Tanzania) which we reach through our multinational clients.
Do you plan to expand your market?
While we have business in Brazil we are opening offices in Sao Paulo with local staff to develop business opportunities in all areas. It is more mature in telecommunications solutions but we are putting together plans for e-wallet.
What is your perspective on the local entrepreneurial sector?
Much ado about nothing. There is an entrepreneurial market that puts things together to sell them and I like it when a project is put together so that it works. It has much more value if it generates jobs and future development.
"If you want to replace cash, you have to include mobile phones".
In Paraguay all mobile phone users will use their e-wallet, what are the advantages?
This is important, because when there is a uniform technological solution throughout the country, solutions based on that technology can be implemented, such as paying for transport without the need to use cash. Banking alone cannot reach all citizens, especially the unbanked, and the tools to achieve this are not simple. A good intention is not necessarily a good solution because the views of the players in an ecosystem have to be taken into account. For example, in Uruguay very significant steps have been taken, such as salaries being paid through a bank account. This means that each head of household has a card, but not the rest of the family. With the wallet what is given to each member is money and you can know how much the balance is at the moment. What is happening today in those countries that are promoting the system is that the cost of financial intermediation is going down. We have to understand that if we want to replace cash, we have to incorporate mobile phones into this plan.
Source: El País
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