Standalone terminals are ruling the market
Currently, the standalone models – machines with built-in data SIM card for direct connection with the mobile network – answer for most sales. And we can point out a few reasons why. For instance, the mainstream data service provided by Brazilian mobile phone companies is often seen as unreliable. Merchants complain of losing sales due to the signal being cut off during a transaction, or not being able to get started at all.
Read more in Portuguese: Moderninha Plus PagSeguro é mesmo a melhor maquininha sem celular?
The requirement of having a compatible smartphone, usually with Bluetooth, to accept cards isn’t always feasible. And the SIM card and data plan included in the price of standalone machines reduce the overall fixed cost. Statistics indicate that most Brazilians have a mobile phone – many people have in fact more than one – but it doesn’t mean they own the latest models.
Standalone card machines solved all these issues. They are commanding the market. PagSeguro (NYSE: PAGS), a child company of the Brazilian web content firm Universo Online (Uol), is leading the way with a range of machines from budget to pro models, hoping to please all segments.
Traditional companies are also investing in SIM card machines that can be purchased instead of rented, now with fixed and transparent fees. To avoid losing sales on their premium market, some are trying to establish new brands: Cielo launched Stelo, and Itáu invested in Pop Credicard, both offering cheaper solutions.
But more competitors are starting to challenge them. Stone (NASDAQ:STNE) became one of the highlights after attracting investments from Warren Buffett’s Berkshire Hathaway Inc and Alibaba’s Ant Financial during their recent IPO.