By Gabriela Mello
SAO PAULO (Reuters) - Delivery startup Rappi is partnering with Visa Inc (NYSE:V) to offer a prepaid card linked to its digital wallet in Brazil, expanding the product's rollout from Mexico and Colombia, where Rappi was founded, executives from the two companies told Reuters.
The tie-up, the latest sign of intensifying competition between app-based wallets in Latin America's largest economy, will give Rappi customers a new way to pay using money saved to the app beyond its current QR code payment feature.
"It is the first of many financial solutions we plan to offer to our users," Rappi co-founder in Brazil, Ricardo Bechara, said in an interview on Tuesday.
Singapore-based Grab, which has a similar business to Rappi's in Asia, struck a deal with Mastercard (NYSE:MA) last year.
Bechara did not specify what other services could be provided in the future. For the moment, he added, the company is focusing on rolling out the pre-paid card throughout Brazil.
Rappi arrived in Brazil in July 2017 and is now present in more than 20 cities across the country, growing an average of 30% per month, which Bechara said is the highest rate among the seven countries in Latin America where it operates.
Its financial services unit, however, is newer. Launched in October, Rappi Pay started by allowing transfers between app users before introducing QR Code payments.
"We do not disclose transaction numbers, but our goal is to have over 100,000 commercial establishments accepting Rappi Pay by year-end," Bechara said.
Besides giving Rappi users an alternative to spending funds kept in the App-based wallet, the prepaid cards could handle transactions beyond the Internet, said Fernando Pantaleao, Visa's vice-president for sales and commerce solutions in Brazil.
It will also allow Rappi to develop better rewards programs, including cash back, and expand its customer base by luring clients who want a debit card but lack a bank account, suffer from a low credit score or do not have regular jobs, he added.
"Rappi has an engagement capacity that nobody else does and this prepaid card will grant its users access to all of Visa's benefits and anti-fraud security", Pantaleao said.