Hello everyone, and thank you for waiting. Welcome to PagSeguro's second quarter 2020 results conference call. This event is being recorded, and all participants will be in a listen-only mode during the conference presentation. After PagSeguro's remarks, there will be a question and answer session. At that time, further instructions will be given. Should any participant need assistance during the call, please press star zero to reach the operator. This event is also being broadcast live via webcast and may be accessed through PagSeguro's website at investors.pagseguro.com, where the presentation is also available. Participants may view the slides in any order they wish. The replay will be available shortly after the event is concluded. Those following the presentation via webcast may pose their questions on PagSeguro's website.
Before proceeding, let me mention that any forward statements included in the presentation or mentioned on this conference call are based on currently available information and PagSeguro's current assumptions. Expectations and projections are reasonable in view of currently available information. You are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those included in PagSeguro's presentation or discussed on this conference call for a variety of reasons, including those described in the forward-looking statements and risk factors sections of PagSeguro's registration statement on Form 20-F and other filings with the Securities and Exchange Commission, which are available on PagSeguro investor relations website. Finally, I would like to remind you that during this conference call, the company may discuss non-GAAP measures.
For more details, the foregoing non-GAAP measures and the reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures are presented in the last page of this webcast presentation. Now, I will turn the conference over to Mr. Ricardo Dutra, CEO. Mr. Dutra, you may begin your presentation.
Good evening, everyone, and thanks for joining our second quarter results conference call. Tonight, I have here with me Eduardo Alcaro, our Chief Financial Officer, and André Cazotto , our Head of Investor Relations. We hope you and your families are well and safe. Everybody knows the past few months has been challenging, and we remain focused on supporting our clients, our business partners, the society, and our employees. By the way, I would like to thank you again, all PagBank, PagSeguro team who have been supporting our businesses from their homes in the last months. Thank you very much PagBank, PagSeguro team. As you'll see in the next slides, even with all impacts generated by COVID-19, our results show our business is exceptionally resilient. Certainly, there are numbers that declined in the quarter.
However the most important operational KPIs, such as total payment volumes, net adds, PagBank users, and so on, have been improving each month throughout the quarter and are growing year-over-year. Important to mention, we have developed features and products and acquired companies to build a complete and unique ecosystem to address the needs of our clients. Regardless of the current moment, we are confident in our strategy and the opportunities ahead of us. We keep investing to grow the company and, at the same time, keep our profitability levels. That said, Eduardo Alcaro and I will present some slides, and we will have Q&A session at the end. On slide three, we highlight the achievements of the second quarter. A challenging quarter driven by volumes rebound, accelerated growth, and stable margins amid social distance measures and economic slowdown.
We saw a strong financial and operational performance, a lot of traction in PagBank and also online TPV in software services growth. Important to mention, micro-merchants proved to be more resilient and faster adopters of new payment channels, and we continue to gain scale in payments and banking, backed by our unique online distribution in an untapped and underserved existing long-tail market in Brazil. TPV reached close to BRL 30 billion, growing 11% year-over-year. In July and August, we saw an acceleration of growth year-over-year, marking 47% and 51% respectively. When compared with the first half of March, which is pre-COVID-19 in Brazil, the first half of July is 21% above, and first half of August is 29% above.
Take rate ended the quarter at 2.72%, down 59 basis points quarter-over-quarter, mainly due to a temporary impact of mix, meaning more debit card transactions and less credit installments directly impacting our prepayment revenues. However, our take rate continues to be way above the listed peers. Our net adds in the quarter were close to 300,000, up 32% versus first quarter 2020 and 1% higher than the second quarter 2019. Active merchants reached 5.8 million with a historic record level of gross adds in June and July, given the higher demand for new devices. Transaction activities and other services revenues grew 4% during the quarter, reaching a pre-tax margin of 31.6%. Non-GAAP net income of BRL 307 million with a net margin of 22.6%. Moving to PagBank, our non-acquiring TPV through banking, digital account, and wallet services reached BRL 10.6 billion, growing 168% year-over-year, another triple digit growth.
PagBank revenue grew 52% year-over-year. In the first half, PagBank revenues reached 7% of total revenues and income, with a growth of 105% in comparison to the same period of 2019. We added another record of 1.2 million new PagBank users during the second quarter of 2020 and reached 4.9 million users in Q2. We are also proud to surpass more than 1 million pure PagBank consumers, with the average number of product users growing 36%, showing the success of our go-to-market strategy to reach clients other than acquiring. 4.6 million PagBank app downloads in the second quarter accumulate close to 22 million app downloads in July, being one of the leaders on digital banks adoption. Moving to online TPV and software services.
Last week, we announced that we reached an agreement to acquire Wirecard Moip in Brazil, the most complete online payments platform in the market, which will help us leverage our omnichannel offer. We will talk more about that in a few minutes. We also announced the acquisition of ZYGO, a multi-sided loyalty and CRM platform. Online TPV grew 121% year-over-year in July, backed by a structural transformation in sales channel and payment solutions and the stronger growth of cross-border transactions. Software subscribers reached 311,000, up 267% versus Q2 2019. Link of payments transactions grew 69% in the quarter, while cross-border payment volumes increased 2.5 x year-over-year. On slide four, we show the main KPIs I mentioned previously. Moving to slide five, we want to recap the achievements of the first half of 2020.
Despite an expected first semester, Pag continued to be a leading company, maintaining long-term strategy focused on unique existing opportunities to provide best-in-class payments and financial products and services to the Brazilian population. TPV reached close to BRL 62 billion, growing 20% year-over-year. Total revenue and income grew 11% when compared with Q2 2019, marking BRL 2.9 billion. Active merchants were 5.8 million by the end of June. We added 526,000 new merchants during the first six months of 2020. Take rate was 3.04. Adjusted pre-tax margin of 31.9%, with non-GAAP net income reaching BRL 674 million in the first six months of 2020. 1% up versus first half 2019, with non-GAAP net margin reaching 22.9% in the same period.
On PagBank services, non-acquiring TPV through banking, digital account, and wallet services reached BRL 19.3 billion, growing 178% year-over-year due to the accelerated pace of new financial and digital wallet products launched to serve both merchants and consumers. Active users were 4.9 million, meaning we added 2.2 million new users during the first half of 2020, with pure PagBank consumers accounting for more than 1 million active users. On slide six, we show the main first half 2020 metrics I mentioned before. Moving to slide seven, we would like to reinforce our focus in growing with profitability. In the first half, Pag's net income was 60% higher than Brazilian listed peers combined, reaching close to BRL 600 million of GAAP net income, down only 6% in comparison to the first half of 2019.
Important to mention, Pag's results excludes the provision reversal we had in second quarter 2020, which impacted positively our bottom line. On next slide, in closing the initial remarks, as we said in our last conference call and in other interactions with investors community, we are observing a sharp recovery of our TPV since the second half of April. Year-over-year, our TPV in May grew 11%. In June, grew 25% year-over-year. Our TPV in Q2 grew 11% when compared with Q2 2019. In July, we observed a better recovery in our TPV grew 47% year-over-year. We continue to see a strong pace in August, growing 51% year-over-year. This trend shows the accelerated migration from cash to electronic transactions caused by the pandemic. The resilience of our diversified merchant base is constituted by micro, small, and medium merchants, and individual entrepreneurs all over the country.
The faster adoption of online, card-not-present, and contactless transactions, and also a large spending backed by the government subsidies. Important to mention, all these volumes are related only to payments transactions. Due to COVID-19, Brazilian government disbursed the relief, we can call corona voucher, to approximately 1/3 of the Brazilian population, and some of the beneficiaries decided to top up and transfer their balances to some banks, including PagBank. However, these top-up volumes are not included in our TPV figures. In the chart below, we can see healthy TPV trends when compared to the first half of March, which is pre-COVID-19 in Brazil. TPV has been improving, and in the first half of July, we reached 121% of the TPV of the first half of March, and 129% in the first half of August.
Right now, most of the states in Brazil are reducing the social isolation, so important cities are reopened, such as São Paulo and Rio de Janeiro, and retail volumes are improving. On the right side of the slide, until August 20, we see we already added more than 250,000 new merchants, surpassing more than 6 million active merchants, backed by another incredible consecutive historical record of gross adds for a unique month in July, which corroborates our view that the addressable market is increasing and accelerating after the pandemic. According to IBGE, since the beginning of the pandemic in late March, the number of new individual professionals increased by 20% year-over-year, and in parallel, close to 9 million Brazilians lost their formal jobs, meaning that millions of people became individual entrepreneurs for need or opportunity.
We continue to accelerate the pace of net adds for PagBank, already reaching more than 900,000 new users until August 20th and surpassing more than 5.8 million active users, expanding our addressable market beyond merchants. On the bottom right side of the slide, we can see some other Q3 trends. Record of POS sales in July and daily TPV record in August. Acceleration of non-acquiring TPV and growing above 200% year-over-year, backed by the corona voucher top-up through our virtual cards and net revenues growing high teens in a year-over-year basis. Because of COVID-19, we continue to see higher participation mix of debit transactions, reaching levels higher than those observed in the fourth quarters. Consequently, we will have a lower mix of credit and installment transactions, which will continue to temporarily impact negatively our take rates and margins.
Now, I will pass the word to Eduardo Alcaro, our CFO, who continues to manage our costs and expenses very closely so that we can navigate through this unique time together. Thank you. Eduardo, please go ahead.
Thanks, Ricardo, and hello everyone. On the next slide, we present our operating figures. Total payment volume reached close to BRL 30 billion, growing BRL 3 billion or 11% when compared to the same period of last year. Our diversified merchant base, no geographic concentration, resilience of the micro merchant segment, and adoption of online and card- not- present transactions supported this strong rebound that continues in July and August. In the next graph, we break down our mix. Like Ricardo said earlier, our take rates are being temporarily negatively impacted by this mix effect. The acceleration on TPV is coming mainly through debit cards, supported by the government subsidies, known as corona vouchers, a BRL 600 paycheck for the most vulnerable families.
In addition, as a consequence of the pandemic, lower consumer confidence and higher unemployment rates are impacting personal credit card leverage and driving financial institutions to reduce credit limits. This impacts the regular and credit card transactions in installments, which is the main driver of our financial income. Additionally, economic sectors where credit in installments are more relevant, such as general merchandise retailers, clothing stores, among others, were more impacted during the partial shutdowns in Brazil. Debit mix reached an unprecedented level of penetration, surpassing 50% of our total TPV in some weeks of Q2, even higher when compared to the highest seasonality observed in Q4. Again, we expect this mix effect to be temporary. It should normalize after the COVID-19 pandemic. The good news is that we continue to gain market share and increase volumes on a year-over-year basis.
On the chart below, our net take rate, which is the blended take rate net from transaction costs such as interchange, processing, and card scheme fees, reached 2.72%, down 59 basis points quarter-over-quarter and 25 basis points in comparison to Q4 2019. On the next graph, we break down the take rate composition quarter-over-quarter, highlighting the most relevant impacts, which are temporary as a consequence of the COVID-19 pandemic. The most relevant is the mix effect, impacting 36 basis points, with 23 basis points explained by the product mix due to lower installment transactions, and 13 basis points as a temporary promotional discount to support our clients during the pandemic. 13 basis points on transaction costs. Remember that in Q1, we had a positive impact coming from a card scheme rebate.
Last, 11 basis points related to others, mainly due to our temporary decision to reduce our credit exposure during the crisis. As discussed earlier, the largest negative impacts are temporary and should recover as the economy and the consumer confidence improves, driving more credit instead of debit card spending. On the next slide, we show our total revenue and income that reached almost BRL 1.4 billion, down 2% year-over-year. Operating revenue and income remaining flattish, down 0.6%. Transaction activities and other services grew almost 4% year-over-year, while financial income decreased 8% in the same period due to lower installment transactions. Bottom right, GAAP net income reached BRL 296 million, a decrease of 8% year-over-year. non-GAAP net income in the second quarter reached BRL 307 million, down 10% year-over-year.
In this quarter, we had a positive impact of BRL 56 million after tax due to a tax provision reversal. Thank you all. Now I'm passing the word to Ricardo, who will comment on the latest business developments.
Thanks, Eduardo. Moving to slide 11, I want to share some figures about our online volumes. PagSeguro was born online in 2006, starting as a new wallet, PayPal-like model, for millions of Brazilians to pay online in a safe and easy way. On the left side of the slide, we can see our online ecosystem. Over time, we built new services and became a very complete online payments platform, including features such as different checkouts, cross-border transactions, online QR codes, link of payments, split payments, and also logistic supports to our merchants through third-party partnerships. More recently, we also launched our own food delivery app. Our online results are encouraging. Year-over-year, the number of online transactions doubled in Q2 2020, and online TPV grew more than 70%.
Transactions of link of payments, a solution easily shared through any social network such as WhatsApp, Facebook Messenger, and also through email or SMS, grew 69%, and our cross-border TPV increased 2.5 x. Below in the chart, we see that in July 2020, our online TPV grew more than 120% year-over-year. Important to say we have very low exposure to sub-acquiring companies, meaning that almost 100% of our online transactions refer to our own merchants using our payment solutions. The pandemic is driving a faster adoption of online card-not-present and contactless transactions. According to a Visa global study, 67% of SMBs are moving to a digital-first mindset, having Brazil as one of the leaders country. We are investing to promote the best omnichannel experience to millions of micro, small, and medium businesses, many of them selling online for the first time.
On slide 12, we present some highlights in terms of online distribution, Google searches, and our app rating. Starting with Google searches for digital banks, PagBank remains at the top with 66% of total shares over digital banks, a consequence of our marketing efforts and product rollout. PagBank app also continues to be the top-rated app among digital banks, maintaining a 4.8 stars in iOS and 4.7 stars in Android, being the most reviewed app among digital banks and payment peers. A consequence of our best-in-class product development and user experience-oriented culture. Since its launch, PagBank app reached 22 million downloads. In terms of revenues, we observe an increase of 50% in revenues from merchants that, in addition to acquiring, use three PagBank products. See the chart below, UOL has the third largest audience in the country, just behind Google and Facebook.
All this reach and brand awareness helps PagSeguro and PagBank distribution. On slide 13, we show some relevant engagement trends in our PagBank ecosystem. We believe engagement is a relevant metric to follow at this stage, once it will help the company to increase the switching cost of our clients and increase the stickiness and loyalty, which will enable future monetization and revenue diversification. In terms of PagBank users, we reached close to 5 million PagBank active users, adding 1.2 million new active users during the quarter, driven by merchants conversion into PagBank users and acceleration of net adds of consumers, surpassing more than 1 million PagBank active consumers, showing our ability to expand our banking and digital wallet addressable market through the launch of new products and services, combining with marketing and online distribution. Non-acquiring TPV reached BRL 10.6 billion, up 168% year-over-year.
Our total credit portfolio, combining loan and credit cards, reached BRL 465 million, down 6% quarter-over-quarter. Since the beginning of pandemic, we decided to block new credit disbursements in order to limit our credit exposure in this period. In Q2, our focus was to support and renegotiate our portfolio in a case-by-case with our merchants. For part of our merchants, we offered a 90-day grace period for repayment. Both measures help us to control NPLs levels. Despite the current environment heavily impacted by pandemic, mainly in late March and April, the majority of the merchants operating with PAGS Capital continued to sell and are recovering volumes. In July, we started gradually to make new credit offers to our best merchants. Crediting is an important tool to create higher engagement with our merchant base and will continue to generate additional revenues for the company in the future.
On financial services, we reached BRL 2.4 billion in PagBank deposits, 41% when compared to the same period of 2019, mainly driven by a larger inflow of boletos or bank slips and wire transfers. QR code transactions grew 40 times when compared to Q2 2019, driven higher usage of alternative payment methods. NFC transactions grew 450% year-over-year, boosted by the pandemic. On the top right, in the first half of 2020, PagBank revenues increased 105% year-over-year, already represent 7% of total revenues and income, on track to reach 30% of total revenue and income in five years. Lastly, we are expanding our investment products through the issuance of new certificates of deposits by PagBank with daily liquidity and higher interest rates. For clients holding investment on PagBank CDs, we offer a free PagBank credit card with credit limit linked to their investments.
On slide 14, we highlight our roadmap of products already delivered in the past two years. Being tech and independent allow us to think exclusively on our clients' financial needs and consequently combine growth with profitability. Since May 2018, we have delivered almost 50 new products, including hardware, software, banking, and services in our super app. In June, we launched Bilhete Único top-up feature. PagBank clients can top up their public transportation ticket in PagBank app using the balance of the digital account. This new feature brings more convenience and helps to reduce lines in ticket counters of buses, subways, and train stations. We also launched Caixa Virtual Card, the option to our user top up and transfer the corona voucher paid by Caixa Econômica Federal.
Finally, we signed a new partnership with Roldão Atacadista, fostering the user of QR code, offering 10% cashback, capped on BRL 30 per social security number. In July, we announced the acquisition of ZYGO, a multi-sided customer engagement and loyalty platform. Lastly, we launched more options of our proprietary CDs with different durations and interest rates that ranges from 100% to 150% over Brazilian interbank rates. Despite the current health crisis, we decided to keep investing in product development and keep committed with our roadmap agenda. The constant development of our ecosystem is key, and we will continue to deploy new products and services on payments, banking, and software fronts. On the next slide, we would like to share some thoughts about the acquisition of Wirecard Moip.
As we remain confident about our long-term growth opportunity, we took the advantage to move forward and the strength of our online payment solutions. Wirecard Moip is an independent institution regulated by Central Bank of Brazil, providing an end-to-end payment processing for e-commerce and marketplace. With the closing of the deal, Pag will combine its best-in-class offline business model with the most relevant online platform for millions of merchants, strengthening its omnichannel strategy and accelerating our growth in online sales. Online sales in Brazil is still in early stages, with only 4% penetration of the total retail sales. It is expected to keep growing as a consequence of the pandemic. Wirecard Moip has 200,000 clients. It is expected to reach close to BRL 5 billion in TPV 2020. A CAGR of almost 40% in the last five years.
Its revenues will reach close to BRL 120 million, a CAGR of almost 30% in the same period. Important to say, Wirecard Moip has positive EBITDA. On next slide, we show our software initiatives. We have several initiatives to help merchants to manage and grow their businesses. In June, we reached 311,000 software subscribers, up 267% year-over-year. In July, we're announcing the acquisition of ZYGO, a multi-sided loyalty platform that enables micro, small, and medium-sized merchants to acquire, engage, and grow their customer base by offering customized marketing and loyalty programs and providing consumers insights and analytics. We believe software offering is one of the key value-added services to keep adding, engaging, and monetizing our clients. On the next slide, we show some of the new products, services, and partnerships. Some of them are already described before, such as Bilhete Único, Roldão Atacadista, and the corona voucher virtual card.
Additionally, we included new merchants on Pede Fácil, including Bráz Pizzaria, a famous one in Brazil. Pede Fácil has been supporting thousands of clients to sell online by providing payments, software, online menu, and orders, and even supporting with the logistic through partnerships with third-party companies. Finally, we are happy to announce we signed a partnership with TikTok. TikTok is the most popular video-sharing social networking service, surpassing 2 billion app downloads around the world. TikTok influencers and content developers may generate revenues by developing short videos, product promotions, and et cetera. With this partnership, PagBank PagSeguro offers a very simple and fast cash out button so that users can transfer their TikTok balances directly to a PagBank account in up to one day and use all the banking and wallet services that we provide.
This partnership will help us to scale our PagBank account with millennials, heavy users of TikTok who are starting their financial lives. Finally, moving to slide 18, I would like to comment about the existing opportunity in Brazil and how Pix could unlock massive financial volumes to be captured and incorporated in the financial system, consequently boosting the usage of PagBank. Pix presents the opportunity to boost electronic transactions and leverage financial services to millions of unbanked and underserved Brazilians. Additionally, we believe that P2P, boleto, and wire transfers are the most impacted by Pix due to the nature of the fast payment transactions, the inefficiency of those products in terms of pricing, user experience, settlement period, and also because of the size of its market, which is 5x larger than the cards market in Brazil.
We believe Pix will be complementary to card payments, mainly because of the maturity of card payments in Brazil, already established in our consumption culture with roughly two debit cards and one credit card per adult, representing 41% of our total PCE, private consumption expenditure. PagBank and PagSeguro are positioned to capture Pix opportunity as a payment and banking provider for both merchant and consumers, offering an integrated end-to-end and flexible platform ready to integrate with several stakeholders to our APIs. In conclusion, we are prepared to increase and consolidate our leadership in long-tail market, which is still huge due to the large number of micro merchants and informal employees, and will grow due to acceleration on shift from cash to electronic transaction and increase our addressable market into the consumer vertical through PagBank.
Although we are pragmatic in understanding and managing short-term impacts of COVID-19, we are confident about the strong fundamentals of our businesses, the strength of our brand, and the PagBank/PagSeguro ecosystem we have built so far. We will keep investing our long-term strategy in people, products, services, and growth. We believe Pag is leaving this crisis uniquely positioned to lead digital transformation of payments and financial services in Brazil for both merchants and consumers. Having said that, we finish our presentation, and we start the Q&A session.
Thank you. We will now begin the question and answer session. If you have a question, please press star one. Our first question comes from Mr. Craig Maurer, Autonomous Research. You may proceed.
Yeah. Hi. Thanks a lot. Couple questions for you. First, you had discussed the impact that stimulus is having on volumes. What's your expectation going forward for stimulus to be renewed, and how important is that for continued acceleration in TPV? Secondly, in looking at Moip seems to play across the spectrum in terms of merchant size for e-com. If you're getting into large merchants via e-com through Moip, will that lead to an omnichannel opportunity that might pull PagSeguro's traditional acquiring up to large merchants? Thanks.
Hi, Craig, this is Ricardo. Thank you for the question. Good to hear you. First part of the answer about volumes, the emergency relief or corona voucher that government is giving to part of the population. The discussions that we are having at this time in Brazil is that it's gonna be extended until December. That's what the discussions are leading to. We're gonna have this money coming to the economy. Just to give an idea, it's close to BRL 50 billion per month that the government is depositing for 1/3 of the population in Brazil. It will probably continue until December. That's the discussion right now between the Ministry of Economy and also the President and the Parliament. It's gonna help in the next month for sure.
After that, it's hard to answer you because it all depends how it's gonna be the rebound, how it's gonna be the unemployment, and so on. We're gonna have this money in the next months. About Moip, you're right. They have a solution that serves clients from all sizes, even if it's small e-commerce or a large e-commerce, not to say marketplaces. For sure, they're gonna open up a door for us to have these omnichannel solutions for e-commerce and large merchants that want to have POS or another solution such as conciliation, things like that. It's not secret for anyone that the world is becoming more digital after this pandemic.
Wirecard is going to help us to leverage this trend and have a better solution for merchants of all sizes in the online arena, and also for those who are clients from Wirecard already and that want a offline solution with POS and so on.
Thank you very much.
Our next question comes from Rayna Kumar, Evercore.
Hi. Good evening. Thanks for taking my question. It's really good to see the strong acceleration in TPV growth that you're seeing in July and into August. How much of that do you think is sustainable? We know some of that's obviously being benefited from the Brazilian stimulus plan. Going forward, how should we think of a sustainable TPV growth for PagSeguro? Secondly, you've added massive merchant net adds, 299,000 in the quarter. Is that a sustainable rate of merchant adds going forward? Thank you.
Hi, Rayna. Thank you for the question. We think these volumes, part of the volumes, of course, are coming from this financial relief that government is sending to the economy, but it's a small part of that. I would say the majority of this TPV is the acceleration that we are having more net adds, as you said. Close to 300,000 in Q2 and more than 250,000 already in part of Q3. It's acceleration of more people coming to our ecosystem. The recovery of our merchants, when we compare with the first half of March, what's happened in July and August, they are recovering. I would say part of that is related to the government relief, but the majority of that is only recovering people that are coming to our solution.
Not to say that during the pandemic, as we presented in these few slides, more people are using online solutions and more online TPV is coming to us. There is this trend from cash to electronic transactions, and more digital transactions are happening in Brazil, and I guess around the world. I guess it is sustainable to have these levels. And in terms of net adds, we gave some preview about Q3 already, 250,000 in 50 days. It's been strong pace.
Okay. Just one follow-up from me. What gives you confidence that after the third quarter, that you get back to that pre-COVID-19 net take rate?
Well, I would say that, as I answer you, part of the TPV is coming from the financial relief. The other part is because we are having more merchants.
As we have more merchants, we have more TPV. That's why I'm confident that we're going to have a strong pace in the following months.
Just one commentary here, Rayna. As we said in the conference call, the presentation, we saw an increase of 20% of new individual professionals in Brazil since the beginning of the pandemic. Many of these merchants, probably because they needed to do that, because they probably lost their former jobs, you can be sure that also created an opportunity window for people to start to become entrepreneurs in Brazil. We're going to take advantage over that. We feel that is the right moment to keep adding merchants. We think that could be sustainable. We're seeing more people migrating to electronic transactions, new kind of merchants, a larger presence of our online business. Even now better with the Wirecard acquisition.
We're pretty comfortable that those positive trends are sustainable going forward.
Great. Thank you.
Our next question comes from Bryan Keane, Deutsche Bank.
Hi, guys. Good to see the recovery here. I want to ask about non-acquiring volumes. I know they were up 190% in first quarter. Revenues look like they were up about 158% in that first quarter. In second quarter, non-acquiring volumes up 168% with revenues up 52%. Much larger gap between volume and revenue growth in the second quarter. Just trying to understand the deceleration in non-acquiring revenues, considering the volumes are still significant. The second question is just thinking about this sequentially on take rate, given the mix changes you guys are seeing for the first two months, should take rate continue to deteriorate a little bit with mix in the third quarter? Same question on net margins. What about net margins in the third quarter as a result of that mix change and investments? Thanks.
Hi, Bryan. Thank you for the question. Good to hear you. You're right. When you look at the gap between the growth in non-acquiring, also the revenues growth, part of that we explain because we've seen more people working with wire transfer in this quarter. We're using products that are not generating revenue in Q2. Also because, as we show in the presentation, we decreased the exposure that we had in terms of credit. We did not give new loans for the base that affects the revenue. Also, as you have a lower TPV, people use less our card. We have a lower interchange revenue. We expect that we're going to recover in the following quarters. I guess, Cazotto would you like to complement?
Yes. Part of the clients in the PAGS Capital product, Bryan, we also let's say, decided to give a larger grace period of repayment, 90 days. For sure that for those clients, we're not capturing the interest of the transaction. This also helps to explain why we saw, let's say, less monetization in the credit product in this quarter. Again, a temporary decision given the pandemic. We are more conservative in the credit originations. As we said, we are starting to see, let's say, the environment improving. Our best merchants are recovering their sales. They are transacting more, so it brings more confidence to gradually, let's say, recover the credit activity with those merchants.
Bryan, this is Eduardo Alcaro speaking. About your question on take rates. First, the main impact in our take rates, I mean, it's related to our TPV mix.
The industry as a whole saw an increase in debit transactions driven by the corona voucher and consumer trends. Consumer are focusing on essential needs, so reducing their purchases in installments, especially in segments that are done in installments. When you talk about apparel, electronics, white goods, travel, and among other products that are done in installments. People are focusing more on the basic needs, which we have more debit transactions. The second thing here is about the number of online transactions that doubled during the quarter, boosting online TPV 60% year-over-year. Take rates in some those payment methods like link of payments are slightly lower in comparison to the average. In the short term, take rates will continue to be under pressure as a result of the mix. We see the same level of take rates in Q3 compared to Q2.
Again, in the long term, we see TPV normalizing and PagBank revenues should positively drive healthy trends for our take rates.
Got it. What about the net income margins, Eduardo, when you think about them sequentially from 2Q to 3Q?
I would say same net income margin levels.
Same thing. Okay, great. Thanks. Stay safe.
Thank you.
Mario Pierry, Bank of America, you may proceed.
Good evening, everybody. Thank you for the presentation. Let me ask two questions as well. Again, you talked a lot about the growth in online transactions. Can you give us a breakdown of how much online transactions represent of your total transactions today? And how do you see this changing over time, especially right now. Your strategy here seems to me is to grow more on online transactions. What you mentioned, that you do have a lower take rate there. If you can give us some color then, what percentage of your volumes today are coming online, and where do you see this going? Second question is related to your financial income. It took a big hit. Can you give us any sense if there's any pressure, though, financial income from the lower rate environments? We've seen historically low levels in Brazil.
Is that also impacting, or should that impact your take rate on financial income? Thank you.
Hi, Mario. Thank you for the question and also good to hear you. We don't give the exact disclosure about the participation of online in the whole mix. I'll tell you that we know, as I said before, the world is becoming more digital and some people were forced to do online transactions during this pandemic all over the world and also in Brazil. It was a great time for us to have this agreement with Wirecard. They have a good solution to serve merchants from all sides and also marketplaces. We will grow online much faster than POS because first our POS base is bigger, so as a percentage, it is impossible to grow in the same percentage of the online. Also because we are seeing people using more online here in Brazil.
When you talk about the take rate, there are two different solutions for the online environment. First one is link of payments, and this is really, let's say, lower than the offline solutions, the POS. If you look at pure e-commerce, the take rate is higher than the POS because we have more risk there. It's an online transaction, we charge more if you are a pure e-commerce or a marketplace. Link of payments is lower than POS, but the other solutions, they have a higher take rate. We expect to be accretive take rate in the future.
Yeah, and also a larger presence of credit installment transactions, especially in e-commerce and marketplaces, Mario. Over time, this could be something, let's say, important for us also in the mix of product and take rate.
Mario, this is Alcaro speaking. Related to your question about financial income, the impact is purely coming from the mix. As you can go straight to our website and you can check the price. We are charging the exactly same prices that we charged last quarter or last year or in the last two years. At the end of the day, it's really a function of mix, having more debit transactions. Being Brazilian, you know that the Brazilians are more focused now on the very basic needs, and very basic needs are not sold in installments. Things that are sold in installments are usually apparel, general merchandise, travel, all those areas where we saw a slowdown in the whole economy.
Okay. This is very helpful. Just a follow-up. Ricardo, do you think eventually you're going to have pressure, though, the ability to maintain your same prices even though interest rates have declined sharply? Is this something that you should do, try to lead this, try to reduce the rates before someone else does? I also had a follow-up on the previous question from the caller before me. The revenues from PagBank are growing at a very good pace, but they're growing much slower than the net adds. If you can give us an idea then of these net adds from PagBank, how many of them are coming from these government packages? If you can give us a breakdown of the revenues that you're getting from PagBank. You mentioned it was the interchange and also some of the credits.
Just to give us an idea of what percentage of these revenues come from online?
Mario, let me answer your first question about pressure on the discount rates. We are not seeing pressure. Actually, you can see the prices have been stable. If you compare to our prices to our competitors, for example, but also they are online, it's exactly same rates. They also haven't changed. We don't see a reason to change just because we don't see pressure here. Still, if you compare to the kind of credit facility that we provide, comparing to, for example, to a revolving credit or even the cheque especial, charging 8% per month is still a very attractive rate.
Yeah, Mario, regarding the revenues of PagBank, the majority of the revenues come from interchange, still today.
When we see the acceleration of net adds in PagBank and the revenues are not following, let's say, the same speed or the same trend, it's because it takes a while for the consumer that is coming to start generate revenues, and it will grow as time passes by. We gave the example in the presentation that the merchant that use three PagBank products have 50% more revenues than acquiring. If they use five products, it's 100% more. I'm gonna give you example. I can sign up for a PagBank account in three minutes, and then I'm gonna receive the card in a few days. Until the point I don't receive the card, I don't generate interchange revenues. I need to put money there to invest in a CD, for instance. If I invest in a CD, I will receive a credit card in a few days.
It takes a while for the revenue to come. It's not a year, but it's not at the same time. It's different when you think about similar to what you have in acquiring. When they receive the device, they start selling, and then they grow in the first months. I guess in PagBank, it takes a while for the consumer to generate revenues, and we are making cross-selling. We are making promotions, trying people to seek more of the solution and use more than one product. It is happening. It is happening, but it takes a little bit to generate revenue at the same velocity of the net adds.
Okay, guys. Now very clear. Thank you very much.
Our next question comes from Jorge Kuri, Morgan Stanley.
Hi, Jorge Kuri, Morgan Stanley. Congrats on the numbers. Two questions, if I may. The first one on expenses. You did a pretty good job on personnel and marketing expenses during the quarter, evidently not a normal quarter. Can you talk about an expense projection for the remainder of the year and for 2021? As revenues pick up, are you still going to continue to invest in the business above the revenue growth? Should we expect expenses hence to grow above revenues? Can you grow both at the same time? What does that mean for EBITDA margins? My second question is, I'm sorry to go back to this, but on the take rate. Is it possible that the debit mix is actually a permanent change in the way cards are used in Brazil?
Because the substitution of cash, which evidently has been very strong post-COVID, is really a substitution by debit, not really credit, and that may not come back. Maybe we have just a more debit heavy mix in your business, as I think you do in other places that have higher penetration of overall electronic payments versus cash. What gives you a pause to say that it is temporary and not potentially permanent? Thank you.
Hi, Jorge. Thank you for the question. Good to hear you as well. I'll talk about the first question. As you said, we control the expenses very well in the second quarter, and we're gonna do the same in Q3. The only thing that I would say that is gonna be different in Q3, as we see the opportunities to grow, we need to accelerate and have the growth. Of course, balancing growth with profitability is something that we always say. What I'm trying to say here is the market expenses in Q3 will be between Q1 and Q2, will not be the same as Q1. It's gonna be between these two quarters because we are seeing opportunities here to grow both of the business, merchants and consumers. In terms of personnel, it's gonna be kind of similar. That's what I have the information at this point.
We'll invest a little bit more in marketing and try to grow fast. As you saw the previous in Q3, some of the numbers in terms of net adds, 250,000 and 900,000 consumers. As Eduardo said before, keep the margin levels at the same, keep the net income margin at the same levels. I guess the take rate, Alcaro can talk a little bit and I can complement if necessary.
Yeah. Jorge, good to hear you. We are seeing on debit transactions, if we go back like four years ago, with the deep economic crisis. We saw the same trends. I think not as dramatic as here, because now we have BRL 50 billion being provided to people every month, and this is a normal pattern. If you see people with more cash on hand, they'll obviously spend more on debit.
At the same time, we do have a credit compression in Brazil. In our view, we don't see this as a permanent change. We see credit compression in Brazil right now. We see BRL 50 billion being dumped in the Brazilian economy every month. The good news here is that we have been adding volumes. In August, above 50% our TPV and adding more merchants. This means that we continue to gain market share, and we are continuing to have an opportunity to expand our addressable market here.
Just one complement here, Jorge. We still have some sectors like bars and restaurants and tourists, where we have a larger presence of credit card transactions, let's say, also being impacted, still under pressure. We're seeing that the activity in bars and restaurants is recovering a little bit, but not 100%. For tourism, it's still not happening. We also believe that some sectors where we have a larger presence of credit transactions or even installments, are still being impacted by the virus and should recover as we have the end of the pandemic.
Thanks for the details and congrats again.
Our next question comes from Tito Labarta, Goldman Sachs.
Hi, good evening. Thanks for the call. My question, a couple on costs. If you look at your costs, they went up in the quarter even though volumes were down. Just to understand, would expect them to run somewhat in line with volumes. Did anything happen specific there that your cost services actually went up in the quarter? Along those lines, looking at your net margin, if we back out that one time, the provision reversal that you mentioned, estimate your margin was actually closer around 19%. Just to understand, because you had mentioned the margin would remain relatively stable or a little bit lower in the quarter, but was that factoring in this provision reversal? When we think about, you mentioned in the third quarter, your margin should also be stable.
Should we back out that provision reversal, so the margin should be stable at around 19%? Just to understand a little bit the cost and the impact of that provision reversal on margins and how to think about that? Thank you.
Hi, Tito. This is Eduardo speaking. This is a good question. Actually, when we were talking about same level of net income margins, it's considering the recurring operations of the company, taking out any extraordinary items. At the end of the day, the tax provision reversal is something extraordinary. To compare a stable margin for next quarter, it should be excluding this one-time event that we don't expect to have in the next quarter.
Okay.
The second question about costs. Actually, here we have good news. You may remember that we have taxes on the intercompany transfer of the devices. Since we are selling more devices, we are having higher intercompany taxes on the devices. As a result, you are seeing the cost of transactions going up. It's really for a good reason, as we are adding more merchants, and you could see that we surpassed, until August 20th, 250,000 net adds.
Okay. Thank you. That's helpful. Just to understand a little bit on the margins, because when you had gave the guidance in the last quarter, it seems it's a bit lower than that. Was anything surprising in this quarter? Was it maybe the take rates was lower because of the mix? Why do you think the margin maybe fell more than you originally had thought?
As we mentioned before, we saw especially in the end of May and June, acceleration of the debit transactions in our mix, having a higher share in our total mix. It came down from originally expected due to the product mix that we are having. We are not seeing in Q3 nothing different from what we saw in Q2. This should be temporary. This is a result of the sectors of the economy where we have credit installments. They are slower than sectors where for basic needs, where we have more debit transactions. We are having the whole country a credit compression.
Okay. Mostly a function of mix, just to understand. If I can ask just one follow-up question on the prepayment, with the receivables market that's expected in November. Do you think that could put some pressure on pricing, maybe offset by higher volume? How do you think that could impact the prepayment fee then?
Hi, Tito, this is Ricardo. The prepayment, the chambers of receivables, we believe it's going to be used for more large merchants, because remember, our merchant sells BRL 2,000 in cards per month. If you consider the mix in a normal situation, we are saying that 30% of that is related to installments. We are talking about BRL 600 per month. They are very small. They don't even have the sophistication to use this kind of chamber of receivables and things like that.
Also remember when they used our services. They need to choose if they want to receive the money instantly or in D 30. The majority of them choose to receive instantly because we are talking about long tail. They just want the money as fast as possible. Once they make the transaction, we already make the prepayment. I see the receivables chamber as an opportunity if you want to go there and bid for someone else's receivables, and less as a threat. I see it's neutral to positive for us.
All right. Thank you.
Next question comes from Neha Agarwala, HSBC.
Hi. Congratulations on the strong results, thank you for taking my question. My first question is on TPV. I believe that some of the TPV includes the volumes generated from the corona vouchers. Would you be able to segregate that and give us some sense of how much would the TPV be if you exclude these volumes? You showed the TPV evolution is quite strong. Volumes in first half of August is already 129% of that in the first half of March. What would this number look like if we exclude the corona vouchers volumes? My second question is on Pix. I understand that some of your revenues is also generated from the issuance of boletos and from wire transfers. These could be at risk if P2P takes off with the implementation of Pix. How much of your revenues is generated from these sources?
Thank you so much.
Hi, Neha. Thank you for the question. Let me just explain here the first, let's say explanation is we are not considering the top-up of corona voucher in our TPV. We are only considering payments that happen in our system. The top-up that some other players consider as TPV or some points they discount or make the disclaimer, we don't have these volumes here in PagSeguro, so it's only payments that happen through our ecosystem. It is hard to say what would be the TPV without all the financial relief for corona voucher, because let's think, someone gets the money, deposits in a bank, and then they decide to use the debit card from this bank. It is impossible to say what is the exact impact of corona voucher to us. I would answer you in a different way.
Let's say we are growing much faster than the whole industry. We are taking market share from the whole industry. If you look at the first semester, in Brazil, the industry grew 3% or 3.5%. We grew 20%. If you look in Q2, the industry as a whole decreased close to 8%. We are growing 11%. We are taking share, we are adding new merchants, we are bringing new people to the system. Be straight to your question, it is impossible to say this is corona voucher, this is not corona voucher. I would say to you that we are having strong trends, putting new merchants, new consumers, and taking share from some other players. The other question regarding Pix, and you asked about boleto. We also see that as a positive thing because we don't have debit card transactions in online environment in Brazil.
It's a very bad experience. Today people don't use debit cards. Some of them decide to use boletos. We can now have this solution that people are gonna use Pix and we can get a take rate of that. Also, part of the people that decide to use boleto, they do that because they want to pay in cash. They want to go to a branch, or they want to go to a place with the boleto and pay in cash and have the confirmation of the payment and things like that. I see that in terms of boleto, Pix is a huge opportunity. Boleto doesn't generate too much revenues for us and there is no debit cards in online transactions, and now with Pix, it's going to be able to have these transactions. It will be positive.
Okay. Thank you so much. If I can ask one last question. In terms of competition, we heard that in the past few months, Mercado Pago has been quite aggressive in terms of acquiring new clients and distributing their POS machines. Could you tell us a little bit about how you see competition in the past few months evolving in your segment?
Neha, as we also talked in some previous calls and since the IPO, the long-tail market in Brazil is still growing. I don't know how much the competition is growing when compared to us, but I'd say that we are very happy with 250,000 net adds in only 50 days in Q3. We had records of sales in June, and then in July, we had records of daily TPV in August, we are doing very well. I don't know if competition is at the same pace as us, but we are not suffering. We don't see our churn going up. We do research all the time with our base. People don't say they are leaving us to go to a competitor. Part of the merchants that stop transaction is because they didn't have the business open because of the pandemic or things like that.
We are not feeling the competition. We are growing faster than what we grew in Q2 last year.
Very clear. Thank you so much for that.
Our next question comes from Thomas Peredo, BTG Pactual. You may proceed.
Hi, everyone. Thanks for taking my questions. I have two. The first one is on net adds in the merchants business. Before the crisis, you were indicating a similar net adds this year than last year, but with the 300,000 net adds until mid-August, this indicates a much stronger trend. I just wanted to try to get a view if you have new expectations for how much net adds could be in Q3 and Q4, if they can continue in the same strong pace as we are seeing in mid-August. Also, what is the expectation for next year? The second question is still on the net adds, but if you could share with us how much of the net adds were using the payment links, to have an idea of how much merchants you already have without using the POS machine, just using the payment links.
How was the churn, if you had any different dynamics in the churn in Q2 and more recently in July and August? Thank you.
Hi, Thomas. Thank you for the question, and good to hear you. Regarding net adds, you're right. We had an expectation for this year. Now we are surpassing the expectation by far. Part of that, we see this trend for our brand, people coming to us because they know PagSeguro and PagBank it's a trust company. They can make the transaction here. They are not concerned about the money coming here. They know it's a serious company, and it works very well. There is all this word of mouth that people talk to each other, that the solution is good, and it's easy to work with. Also, we see part of the competitors deciding not to compete in long tail anymore.
They were vocal saying that they would not invest in long tail because it is hard to make money because they do not have the scale, and they do not have the complete ecosystem. We always say here, people come to us because they see us a more complete solution. Not only the POS, but also they receive the money right after the transaction. They receive a card to access the balance of the account. As I said before, we are in a really strong pace. When you have a situation like that some people also decide to work by themselves, some of them because they need. We also see more demand for our services and our device. That is why we had records of sales in June and then a new record in July.
We see the long tail market is expanding. We are addressing this market and accelerating to try to grow as fast as possible to gain share. As I said before, in the first half, the industry grew 3.5%. We grew 20%. When we make research with the merchants that come to us, still today, 80% of the merchants that come to us did not accept cards before joining us. It's not a zero-sum game here. We are bringing new people into the system. Some of them come because they want to sell with PagSeguro, some of them come because PagBank. We are in a very good position. Looking to Q3, right now, I guess what we can say is 250,000. We can make these projections. It's going to be more than 300,000 in Q3. That's what we expect because we had 250,000 only in 50 days.
I don't see why Q4 would decelerate, but it's hard to give a projection for 2021. I guess we are not in a position to give a projection for 2021. A lot of uncertainty looking forward and volatility in these times. We have a strong brand. We invest in market. We are investing a little bit more in market in Q3, are seeing the results. When I look forward, we are confident it's going to be a good year in terms of net adds, in terms of the new merchants and new TPV coming to us.
Okay. Just a follow-up on the net adds. How much of them are clients using the payment link? If you have any different dynamics in churn, how did churn behave in this Q2 and early July and August?
Yeah. In terms of link of payments, we have many merchants that decide to use link of payments, but I would say in this 250,000, we don't have a large number of merchants that came to us only to use link of payments. I would say that the majority of that, not to say more than close to 100% of those, they bought devices. Of course, they can also use link of payments because of some situations they have, or they just want to serve their clients, but it's not boosted by link of payments. This 250,000 is not boosted by link of payments. It's people that are coming to us and buying devices and choosing a POS or a smart POS to sell with us.
In terms of churn. We see that it's very common in PagSeguro that people come to us, they make a transaction for one month, and then the following month they stop, and then they come back again. We have this back and forth in long tail. We had this, let's say, decrease in April and May, but when looking in June, we recovered more than 100% of the base that we saw that were transaction in February and March. There is no churn. No, let's say, spike in churn because of the pandemic. People just sold less because the business was closed or some situation, but they're coming back. They're coming back. We see that the recovery is being very strong and very fast.
Okay. One final follow-up, if I may, is if you already see a trend of clients that started using PagBank and then became merchants of PagSeguro. Did you see this reverse trend?
Yes, Thomas, we have this situation. People that come to us, they come, they sign up for PagBank, at some point, they buy a device and decide to become a merchant. It's not the majority of the new merchants at this point, but we have merchants that come to us first because of PagBank and then afterwards they decide to buy a device and start selling with PagSeguro. That's why we say that when we invest in the platform for PagBank, it's not a platform only for consumers. It's a platform that serves both merchants and consumers. We have this situation, people coming to us because of PagBank and then become a merchant after a while.
Okay. Very clear. Thank you very much.
Our next question come from Jeff Cantwell, Guggenheim. You may proceed, please.
Hi. Thanks for taking my questions. Thanks for squeezing me in. Apologies if I missed some of this earlier. This is certainly an impactful call. I just wanted to see if I can circle back and ask you one on PagBank. Can you talk a little more about the growth that you've seen in the user base? Specifically, you now have over 1 million consumers using PagBank, and you're also talking about another 900,000 net adds through August 20th. It sounds like you're on track for another record quarter in the third quarter. What's driving that? Do you think those consumers are using PagBank as their primary account? I just want to get a feel for how entrenched that user base is. Second, it's certainly interesting to watch your strategy with the partnerships you're making with PagBank.
I guess my question that I have for you is, do you think the partnerships here with TikTok, can that grow into something meaningful eventually? Can that help accelerate the number of customers using PagBank? It would be great to hear your thoughts on that. Thanks.
Hi, Jeff. Thanks for the question. You're right when you talk that we will probably have another record of PagBank net adds in Q3. In Q2, we reached more than 1 million consumers using PagBank. We also make research with this base. We have, let's say, a decent percentage of these consumers that use us as a primary bank. It is getting better as time passes by. Why is that? We launched PagBank in May 2019. It was a very basic account. We started rolling out new products. Just to give some examples, in September last year, we started paying interest in the balances. After that, in November, December, we offered a few credit cards for some consumers, and then we launched CDs, and then we launched new partnerships.
Now people can have a CD here that pay 150% CDI. That's why people are coming to us and see that we have a complete digital account. Of course, it's not complete yet, but we are rolling out products, and that's why we invest in platform. There are many things that we need to do. We launched some micro-insurance in Q1 this year, PagBank Health. There are some others that we will launch as well. We are making this account more complete. People will use as a primary bank more and more. They come to us part of because they see it's a free account with a lot of services, and that are for free. That's first thing. The second one is because during the pandemic, people saw the need to use more digital banks in Brazil.
That's a trend that is happening here and probably it's happening around the world. The branches were closed. People could not go there to make some basic operations. There is this demand for people to use more digital banks. We see a good trend and a good opportunity for us. As I said before, the world is becoming more digital. We thought that we were digital already, but now with the pandemic, there was this acceleration. More people using more digital services. Regarding TikTok, it's still too early to give, let's say, the number. We started a week ago. TikTok is very used for millennials. Some of them, they cannot have a bank account. It's still too early to give a preview of what's going to happen. Maybe in the next call, we can give more color about that. For sure, it's a good partnership.
It's a strong social network and services. Even if people don't come to us to create an account, at least we're going to have, let's say, the exposition of our brand for these millennials, and it will help us in the future for sure.
Okay, great. Thank you.
Next question comes from James Friedman, Susquehanna. You may proceed.
Hi. Thank you. This is a good investor relations presentation. I just had a couple of follow-up questions. The first one is, when would you suggest that we start to layer in Wirecard? Is this year too soon, or is it more a 2021 event? In slide 18, this is the one where you talk about Pix, Ricardo. What do you mean in this example by the barcode replacement? If you could just elaborate on that, and then how should we be thinking about the financial model? Is there any take rate observation you would have about what Pix might look like if it's a funding source for you? Those are the two questions, Wirecard and then Pix. Thank you.
Hi, James. This is Eduardo. I'll take the first question. The Wirecard acquisition now is only subject to antitrust and Central Bank approval, which we don't envision any difficulties here. Probably in Q4, when we start to consolidate their numbers.
Yeah. Going to slide 18, James, first of all, thank you for the question. Good to hear you. How does it work today? Let's say, if you want to pay someone or an e-commerce through a boleto, in this boleto, you have a barcode, and then you can generate this bank slip. There is a barcode, and you go to your bank app, or you can print that to pay in cash, and then the money is going to come to the merchant in the next day. Only after that, they're going to have the confirmation and send you the products or, make the services available for someone that is buying or for someone that is paying. With Pix, this could happen automatically, so people just can go to a website or a screen and then make the transfer.
It's gonna be 24 hours a day, seven days a week. Regarding how it's gonna be the economics for us? For sure, it's gonna be the source of funds because PagBank is an account that people can send the money they will receive through Pix. They're gonna send the money to us. Also we can offer solutions with charging take rates for our merchants if they accept Pix. What is defined is that people that is buying will not pay anything. The people that are receiving, if it is a business, regardless if you are a small business or not, the company that is making this connection can charge. For sure, we are gonna offer this for our merchants. We will have take rate in this type of transaction.
That's something that or we have a very small take rate today, or maybe we are out of this market at this time. It's an opportunity to reach this market that is 5x larger than credit cards market or cards market.
Great. Thank you very much.
Next question comes from Josh Beck, KeyBanc.
Thank you for squeezing me in. I just have a higher-level question. Obviously, we're all starting to get a lot of information on Alipay and China and certainly what a super app can look like. In the U.S., we have PayPal, and that's a pretty good example of a really powerful wallet. I'm just wondering, when you think about Brazil, where do you see the consumer ecosystem going to in the next, call it five years? Also, how do you think about the importance of QR codes within this kind of new consumer digital ecosystem?
Hi, Josh. Thank you for the question. Good to hear you. That's a discussion that people always bring to us, making the parallel with China. It's worth to say that we went to China many times to understand what's going on there. What we always say is there is only one China in the world. It doesn't mean that what works in China is gonna work in another emerging country. I guess the main difference here is that in China, they didn't have the penetration of cards or the plastics, if you prefer, that you have in Brazil. Today, 40% of PCE is already happening in cards. In China, they only had the cash, the paper, and then they went straight to the mobile phone. They didn't have this plastic culture that we have in Brazil, first.
They didn't have the credit that we have in Brazil. People use credit card a lot, it's different. People use only the debit. We have also this culture of credit and credit with installments. We are, let's say, much more in front of China in terms of plastics or cards or things like that. They went straight from the cash, the paper, to the mobile phone. That's the first thing. Second one is about super app. We are always building our app to try to be a super app and have additional services. There are some other companies doing that down here. The conclusion is, it's hard to change consumer behavior. People keep using the cards. Of course, some of the early adopters use the super app, but some people use the card.
I see a very different situation when you think about that super app is going to come to Brazil and be successful in terms of disrupting the industry that you have here. Even if you think about some of the social benefits, the government paying in cards. It's very common here for people to use cards. We gave some information in the presentation. On average, an adult here in Brazil have two debit cards and one credit card. They use credit card a lot because we have 30-day grace period without any interest. Different situation, different environment. That's why we keep selling thousands of devices of POS in Brazil because people use card. If the consumer wants to use the card, the merchant needs to accept it.
That's why they need to have a POS there, and that's why we are selling records of devices in June and July.
Really helpful. Thank you for the context on the market there. Really appreciated.
Next question comes from Guilherme Grespan, JP Morgan.
Hey, guys. Thank you for the presentation, opening for questions. On our side, this is actually a follow-up from the previous one on the inventory tax. It was not fully clear to us. If I'm not mistaken, the last time we discussed this on conference call, it was expected to be a little bit lower the impact from these transfers. We just wanted to dig a little bit deeper on the dynamic of what is happening. We are trying to understand here if, first, you have a runoff inventory there in the subsidiary that as you sell more POS, this impact in terms of tax starts to happen. If that's the case, can you provide us any soft guidance on what is the size of this inventory or eventually how long it's going to last, those impacts?
If there's a second situation in which the new POS acquisitions that you guys are buying from suppliers, if it's happening on the subsidiary and then you are selling on the holding. If that's the case, which was not clear to us, what is the benefit of making this structure? Thank you.
I'll start with the last question. The benefit, we do have a tax benefit of doing that through this subsidiary comparing to the holding company of PagSeguro. I think we mentioned that in the last call. It's not really a one-off. We are actually pleased to what happened. We posted record devices sales in June and especially in July. We are not seeing this figure coming down for a good reason.
Okay, just as a follow-up, Alcaro. Just to be clear, as long as you continue selling POS, this impact is going to take place, I mean, in the following quarters.
Yes. If we keep selling more, it should increase. If we sell less, it should decrease. It's simple as that because we are doing that through a subsidiary company.
Okay, thank you.
Once again, if you have a question, please press star one. It is concluded, the question and answer session for today. I would like to invite Mr. Dutra to proceed with his closing statements. Please go ahead, sir.
Hi, everyone. I just want to thank everybody for our time today. We hope all of you and your families are safe and healthy, and we look forward to being able to see all of you in person as soon as possible. Thank you. Thank you very much for our time.
Thank you. PagSeguro's conference call is concluded. Thank you very much for your participation. Have a nice evening.