The Portuguese fintech company EuPago will replace banks in direct debit collections for smaller Portuguese companies, as these businesses lack the negotiating power to negotiate with their banks.
With the new payment directives, it is now possible to replace banks in companies' relationships with their debtors. EuPago points out that collection costs already represent 4,5% of the national GDP, and only 14% of payments are made within the agreed deadlines.
In 2018, according to the Bank of Portugal's Payment Systems Report, direct debits were the second most used payment method, right after cards. “ Direct debits are no longer exclusive to banks, and even the recent tax payment system used by the tax authorities can now be used by any professional ,” explains José Veiga, CEO of EuPago.
EuPago aims to process two million transactions in 2020, corresponding to approximately 10% of its payment volume. " I believe that, of the two million transactions we estimate, 80% will be processed for the first time, which clearly reflects the importance of this measure ," emphasizes the same representative.
The fintech company argues that the new directives have made life easier for people, especially regarding forgetting to pay bills, eliminating concerns about a lack of means or resources to negotiate with banks.
