SAO PAULO (Reuters) - SoftBank-backed delivery app Rappi is launching credit cards for its users in Brazil, expanding its financial products portfolio as competition in the payments sector heats up in Latin America.
Rappi partnered with payments company Visa Inc to offer the credit cards, marking the two companies' fourth such collaboration in Latin America, following similar launches in Mexico, Colombia and Peru. Rappi also plans to expand financial services in its remaining five markets.
Rappi believes financial services can boost its delivery app usage, said João Paulo Félix, chief executive of RappiBank, a Brazil-based digital bank the company launched earlier this year.
"It creates a virtuous cycle, as extending loans to users and partners means more deals within the app," he said, adding that as Rappi tracks more consumer habits, it can be more assertive in its credit offers.
Rappi, which arrived in Brazil in 2017, joins key e-commerce players like Mercadolibre, Magazine Luiza and Via Varejo in launching financial tools that are integrated with their existing services.
Last year, electronic payments in Brazil totaled 2 trillion reais ($400.84 billion), up 8.2% from 2020.
Users of Rappi’s credit cards — which include fee-free RappiGold and RappiPrime Infinite, a premium card that will cost users 89 reais a month — will receive at least 3% cashback on Rappi purchases and a minimum 1% elsewhere.
Rappi offers working capital credit lines to restaurant owners and merchants it partners with. Félix said the app is planning to launch insurance products for pets and mobile and become a full-service retail bank.
($1 = 4.9895 reais)
(Reporting by Jimin Kang, additional reporting by Carolina Mandl; Editing by Aurora Ellis)