Main idea

We picture the informal economy as a remainder: cash, making do, a zone modern systems haven't reached. That image assumes informality and technical equipment exclude each other.

In the State of Rio, they coexist without difficulty. Vendors walk the sand with drinks, maté and ice cream and take payment in cash, by card or by instant transfer. Hairdressers who come to your home, dog walkers, seamstresses, people who bake cakes for parties get paid the same way. A fruit seller shows up in an old pickup in a gated residential neighborhood, cuts open pineapples in the street, and has a card reader on hand.

What digital payment changes isn't the existence of that economy — it was there before — but its compatibility with the rest. A system driven by the Central Bank ends up used in the country's least formal situations, and nobody there finds that surprising.

Why it matters

This removes a segmentation criterion many companies use without saying so: equipping or not equipping according to an actor's assumed formality. An undeclared actor can be perfectly equipped, and therefore addressable.

And it overturns an adoption forecast: if the number of users is estimated from registered actors, it is wrong.

Nuances and limits

Equipping yourself doesn't mean formalizing yourself: the transaction becomes digital without the activity changing status.

And the traceability that digital introduces is real; it simply isn't what dominates in the experience of those who use it.

Open questions

• Does a traceable means of payment eventually drive the formalization of an activity, or do the two stay durably separate?