Great opportunity: Integrated finance in agriculture

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Agriculture is the engine that enables our global population to grow and prosper. But there is still a significant opportunity relative to other industries in the transition to integrated finance and digital payments.

Furthermore, the seasonal nature of agricultural production cycles poses a unique challenge. Small and medium-sized farms rely on harvest revenue to pay for seeds, fertilizers, and equipment, leading to a cash crunch between cycles. This demand for financing and scarcity of digital payment options creates a largely untapped market for banks and Fintechs to implement customized solutions that benefit all stakeholders.

One clear opportunity: online agribusiness marketplaces, built to make exchanging goods how to get south korea whatsapp number easier for everyone. Imagine Facebook Marketplace, but for large orders of fertilizer or tractor equipment. While these digital platforms allow farmers and suppliers to organize sales more efficiently, payment often takes place off-platform, in cash or checks. The volume of transactions across the value chain amplifies cash’s shortcomings and increases considerable risk for farmers who rely on it. With the support of a partner, such marketplaces could offer digital financing or payment options directly on the platform, allowing for more efficient and secure payment processing.

Latin America has gone from a region with nearly half of its population unbanked to a booming digital economy, projected to double by 2026. 1 That shift is reflected in the payment methods of the Brazilian farmers surveyed: Most now use a combination of digital platforms, instant messaging, and in-person interactions for agricultural purchases, though more than a third still use cash as their primary form of payment.²

The development of digital marketplaces for agricultural purchases has been a welcome innovation for the industry, but most platforms lack integrated payment options. Buyers and sellers agree on a price and then make payment outside the system, creating delays and requiring tedious, manual processes. Incorporating payment processing within an already popular platform would differentiate the marketplace from its competitors and offer a seamless and secure transfer of funds for all parties.

Agrotoken, a Brazilian fintech company specializing in real-world asset (AMR) tokens for agricultural products, announced an agribusiness collaboration with Banco do Brasil, allowing farmers to purchase fertilizers and equipment directly on the bank’s digital platform in the tokenized form of their grain production.³ This innovation, based on Blockchain technology, eliminates the hassle of cash or check payments for both producers and distributors.

The cash flow challenges faced by small and medium-sized farms present a significant opportunity for the integration of digital payments and embedded finance. Banks, fintechs and other stakeholders are positioned to benefit from the development and implementation of these tailored solutions. Not only can they help smooth expected gaps in cash flow and improve access to credit, but they can also improve efficiency and security in the value chain. As such, the transition to embedded finance presents a major opportunity for the agricultural sector.