Pago46: Revolutionazing Payments for Vulnerable Populations in Times of COVID-19

implementation

The project objective is to improve the ability of the region's consumers to access products and services available through digital platforms, by supporting the consolidation of an innovative payments solution –advanced by Pago46– that brings together cash and digital transactions and also generates additional income opportunities in the gig economy. To achieve this, the project will provide crisis response financing to Pago46 under the Emergency Financing Line for Startups and Scaleups (LIFESS) Line of Activity, to help this startup cope with the effects of COVID-19 and carry on its business, while it completes its capital raising efforts. Pago46 is a regional startup offering an innovative on-demand cash-to-digital payments solution that delivers payment services to last mile clients. Pago46's solution is innovative in two ways: (i) it allows unbanked or underbanked consumers to pay with cash for goods and services being offered digitally, right from the place where the consumers are located and with minimized contact with the payment collection agent or the merchant; (ii) it takes advantage of LAC's growing gig economy market to mobilize a massive network of Pago46 mobile "agents" to facilitate the transactions. This activity also creates additional income opportunities for the agents, who often come from lower socio-economic class themselves. IDB Lab's contribution of up to US$600,000 will consist of a bridge financing, structured as a senior loan with an option to convert into Pago46's equity stock, at a future capitalization round. IDB Lab´s financing will be used by Pago46's as working capital to fund its operations and to generate improvements in the company software, applications and technology related to its payment products and services in its current countries of operation and to expand services to Ecuador. As a result, this project is expected to benefit consumers and users of Pago46 payment services in Argentina, Chile, Mexico and, potentially, Ecuador to gain access to the digital economy and small businesses and gig economy workers to benefit from additional income opportunities, as Pago46 agents.