Miranda’s Weekly Mex FinTech Monitor
October 16, 2023
Mexico FinTech News
Fintechs are winning ground
According to a report from El Financiero, FinTechs associated with retail chains like Cashi, Walmex’s digital wallet, and Spin by Oxxo, are providing financial services to 25.4 million Mexicans, an increase of 124.3% from the same period of 2021. Collectively, retail chains including Soriana, Sanborns, Liverpool, and Suburbia, among others, are providing financial services to almost 3 in 10 formally banked Mexicans. Spin thus far leads this category providing financial services to 6 million people through their more than 21,000 Oxxos.
El Financiero, 10/13/2023, Alejandra Rodríguez: Cadenas comerciales duplican a sus clientes bancarizados en el país
Ualá doubles down, replaces country manager
Ualá says it is offering depositors yields of 12% on deposits (compared to 9% at Nu México) and 5% cash back up to P$500 per month (ie, P10,000 of spending) on either a debit or credit card. This would be the best offering for customers in the Mexican market right now, and if true, should lead to a big increase in clients and usage. (Previously, Ualá claimed it was offering 9% yields on deposits but due to onboarding issues with the SAT, in practice most customers were not able to get that, undermining its market credibility somewhat). If customers are indeed able to take up the new offering, Ualá will likely lose even more money than it currently does as the cashback is far above interchange fees, especially on debit cards, and funding costs will be very high compared to other banks. Competitors are asking if this latest move smacks of desperation, and how long can it last. Meanwhile, Ualá replaced the respected and highly experienced Mexican Luis Madrazo as Country Manager with the youthful Argentine company insider Andrés Rodriguez Ledermann.
El Economista, 10/11/2023, Fernando Gutiérrez: Ualá intensifica su oferta en México: anuncia cashback y eleva rendimiento a 12% en ahorro
Other news
El Economista, 10/10/2023, Sebastián Estrada: Fondeadora se incorpora a la billetera de Google
LatAm FinTech News
Chilean FinTech raises US$ 40.8 million
Galgo, the largest marketplace for sale and financing of motorcycles in Latin America, raised US$ 40.8 million, in a round led by Nazca. With the new funding, Galgo plans to expand its presence in the countries in which it currently operates: Chile, Peru, Colombia, and Mexico. Recently, a Ugandan FinTech, Asaak, acquired Galgo’s local competitor in Mexico, FlexClub which provides loans to acquire a car to service drivers.
Tekios, 10/11/2023, Staff: Fintech chilena Galgo levanta US$40,8 millones y consolida la venta y financiamiento de motos en A. Latina
Ecuadorian unicorn Kushi becomes first regional non-bank acquirer
Kushi claims it is on its way to becoming the first regional non-bank acquirer, effectively allowing it to operate as an intermediary between merchants and card payment networks facilitating transactions between merchants’ banks and the card networks and ensuring the smooth functioning of transactions. Kushki has an acquirer license in Mexico (following its acquisition of Billpocket in 2022) and plans to acquire licenses in Chile, Peru and Colombia, to facilitate inter-country transactions. According to a company spokesperson, the concentration in the acquiring sector is due to the fact that acquirers were originally created to support banks.
DF Sud, 10/11/2023, María Jesús Doberti: CEO de Kushki: “Hemos creado un sistema de plomería en América Latina y ahora es tiempo de que pase el agua”
Other news
Forbes Colombia, 10/09/2023, José Caparroso: Proptech colombiana Macondo es comprada por la fintech Bricksave
LatAm Fintech Hub, 10/11/2023, Staff: Fintech argentina Belo lanza cuenta en dólares para recibir transferencias desde el exterior
Bloomberg Línea, 10/13/1023, Daniel Guerrero: SIC fijó reglas para que las fintech puedan entregar créditos en Colombia
Forbes Chile, 10/12/2023, Vanessa Arenas: Finnovista: Fintech chilenas crecieron un 29,5% anual desde 2021 hasta llegar a las 300 en 2023
Global FinTech News
India’s leading payment method causes trouble for ecosystem participants
At a recent conference, Mastercard’s CFO Sachin Mehra said that while UPI, a real-time payments method, had digitalized payments, he remained cautious about its commercial sustainability. He pointed out that while card giants like Mastercard and Visa charge merchants a fee for consumer transactions, UPI functions at no cost to the merchants. Undeniably, the reduced cost and government support has facilitated the adoption of mobile digital payments, with UPI expected to account for 90% of retail digital transaction volumes in the next five years.
TechCrunch, 10/11/2023, Manish Singh: Mastercard CFO says India’s UPI ‘incredibly painful experience’ for ecosystem participants
US FinTech aims for IPO
US FinTech Stash, an investing app, said it would use the US$ 40 million it recently raised through a convertible note to aim for an IPO. In 2021, the company raised US$ 125 million at a US$ 1.4 billion valuation. A company spokesperson said that it had intentionally opted not to raise more venture capital largely due to market conditions. Stash, which has currently 2 million active subscribers, did not provide more details on the potential IPO.
TechCrunch, 10/13/2023, Mary Ann Azevedo: Armed with $40M in fresh capital, fintech Stash says it’s moving toward an IPO
Other news
PYMNTS, 10/13/2023, Staff: Partnerships and SoFi’s Galileo BNPL Expansion Lead FinTech IPO Index 1.3% Higher
Cognitive Business, 10/06/2023, Staff: US FinTech Startup Funding Saw a Precipitous Fall in the Third Quarter
Fintech Futures, 10/09/2023, Tyler Pathe: Fintech unicorn Slice to merge with India’s North East Small Finance Bank