MI’s Mex FinTech Monitor – August 26, 2024   

MI’s Mexico FinTech Monitor – August 26, 2024   

 Mexico FinTech News 

 Nu’s Strategic Expansion Prioritizes Mexico 

Cristina Junqueira, co-founder of Nu, highlighted the strategic decision to prioritize Mexico in the company’s expansion efforts.  Nu sees significant potential for growth in the region and plans to continue investing in expanding its offerings, focusing on providing accessible and innovative financial products to Mexican consumers. Even though Nu now has over 8mn customers, and $3.5bn in deposits, the SOFIPO continues to lose money every month, and with expensive deposit growth outstripping modest credit growth, that is likely to continue for some time. However, the company is bringing down deposit yields – now at 13.5% – and according to Junqueira “our NPLs in Mexico have gone down in the past 12 months by almost half. Like they’ve come down from about 11% to about 6%. We’ve seen a much better mix of customers coming in like every month, through our monthly acquisition cycles.” 

El Economista, 08/22/2024, Sebastián Díaz: Cofundadora de Nu: Acierto estratégico priorizar a México en su expansión 

Nubank CEO dishes on the neobank’s profit surge and how tourist VCs in LatAm have gone home | TechCrunch 

Nu Videocast | Mexico and international expansion | México e expansão internacional (youtube.com) 

 

 

FinTech Metrics and Digital Transaction Trends in Mexico 

The Bank of Mexico’s 2023 Financial Infrastructure Report shows a gradual shift towards digitalization in the country’s financial ecosystem. Nonetheless, Mexico remains far behind most other countries of similar levels of development, especially Brazil, and Central Bank initiatives to push digitalization such as CoDi and DIMO have been failures so far due to resistance from the country’s dominant traditional banks. As Mexico warms to FinTech innovations, digital transactions have gained ground over traditional cash-based methods, driven by the adoption of electronic payment systems. These figures highlight Mexico’s ongoing transition to a more digitally focused financial system, driven by changing consumer behavior. 

  • 37% growth in SPEI transactions: Reaching a total transaction value of MXN 197.6 trillion, which equates to 6.3 times Mexico’s GDP.  
  • 18% increase in card payments: Illustrating the shift towards cashless transactions. 
  • 27.5% growth in e-commerce payments: Reflecting the expansion of Mexico’s e-commerce market. 
  • 7.2% decline in ATM withdrawals: Signaling a reduction in the use of cash as electronic payments become more prevalent. 

Banxico, 12/31/23, Staff:  Informe Anual sobre las Infraestructuras de los Mercados Financieros 2023 

Salvadoran Fintech DitoBanx Expands to Mexico, Targeting Young Users with Bitcoin and USD Services 

DitoBanx, the Salvadoran digital financial services platform, announced the expansion of its operations to Mexico, targeting young users aged 18 to 32 with services including Bitcoin and U.S. dollar transactions. The company offers a DitoWallet, an international digital credit card, and plans to support tokenization in Mexico. 

TWIF, 08/25/2024, Staff: !DitoBanx llega a Mexico¡ 

Other news 

4ecommerce, 08/23/2024, Juan Rodríguez: Llega a México Ditobanx, FinTech salvadoreña que busca fomentar la inclusión financiera 

E&N, 08/24/2024, Staff: FinTech Ábaco con miras de expansión tras ronda de inversión de US$4 millones 

 

LatAm FinTech News  

Mercado Libre Launches Its Own Stablecoin 

Mercado Libre, the Latin American e-commerce giant, has introduced in Brail its own stablecoin, known as the “MELI Dólar.” The stablecoin is pegged to the U.S. dollar and aims to enhance the financial ecosystem within Mercado Libre’s platforms. It offers users a secure and stable digital asset for transactions, which can be used for purchases, savings, and transfers. This initiative strengthens Mercado Libre’s position in FinTech, leveraging its broad customer base and digital wallet services to integrate blockchain technology and drive financial inclusion in the region. 

Reforma, 08/21/24, Reuters: MercadoLibre lanza su ‘stablecoin’ respaldada en dólares 

Mercado Pago launches dollar-backed stablecoin in Brazil – ThePaypers 

Innovation and Regulation Propel Neobanks’ Growth in Guatemala 

The rise of neobanks in Guatemala is being fueled by a combination of innovation and supportive regulation. These digital-first banks are modernizing the financial sector by offering convenient and accessible services, particularly to underserved communities. However, their success hinges on regulatory frameworks that ensure both growth and financial stability. By prioritizing flexibility and customer-focused solutions, neobanks are gaining consumer trust, with innovation and regulation remaining the cornerstones of their continued expansion. 

Latam FinTech HUB, 08/22/24, Valentina Moreno: Innovación y Regulación: Claves para el éxito de los Neobancos en Guatemala 

Yuno and Nequi Partner to Enhance Secure Transactions for Colombian Digital Payments 

Yuno, the Colombian global payments orchestration platform, and Nequi, the Colombian digital financial platform, announced a partnership aiming to provide secure transactions for Nequi users across a broad range of merchants, leveraging Yuno’s advanced encryption and fraud prevention technologies. 

TWIF, 08/25/2024, Staff: Yuno teams with Colombia’s Nequi 

Other news  

FinTech Newsweek, 08/23/24, Alexis Nickin: Latinoamérica se mantiene firme en crecimiento FinTech 

Mundo Ejecutivo, 08/21/2024, Aldo Mejía: FinTech Summit Latam insiste en la importancia de las tecnologías que impulsan al sector financiera 

 

Global FinTech News  

 Synapse’s Collapse has Frozen Nearly $160M from FinTech Users 

The collapse of Synapse, a FinTech infrastructure provider, has resulted in nearly $160 million in user funds being frozen. Synapse, which provided banking services to numerous FinTech companies, faced operational failures and regulatory issues, leading to its downfall. The situation has caused disruptions across the FinTech ecosystem, affecting many companies that relied on Synapse’s services to power their financial products. The incident raises concerns about the stability of banking-as-a-service providers and their regulatory oversight. 

Tech Crunch, 08/22/2024, Mary Ann Azevedo: Synapse’s collapse has frozen nearly $160M from FinTech users    Other Sources:  CNBC, Bloomberg Línea 

 

Bolt Looking to Raise $450M as Breslow Returns 

Bolt, the e-commerce checkout company, is undergoing a significant turnaround effort, which includes raising new funding. The company, once valued at $11 billion, has faced challenges due to leadership changes, layoffs, and operational difficulties. Ryan Breslow, the company’s founder, previously led Bolt’s rapid expansion, but the company now aims to stabilize and regain investor confidence with a new direction and strategic initiatives. The upcoming funding round is crucial for ensuring its sustainability and growth in the competitive FinTech space. 

Crunchbase, 08/20/24, Chris Metinko: Bolt Looking To Raise $450M As Breslow Returns 

  

Nala, African FinTech, Offers Better Remittance Solutions for Workers 

Nala, an African FinTech company, is providing workers with an improved method for sending money back home. The platform focuses on offering lower transaction fees, faster transfers, and better accessibility, addressing common issues faced by migrant workers when sending remittances to their families. 

Forbes, 08/21/24, Segun Olakoyenikan: Esta FinTech africana ofrece a los trabajadores una mejor forma de enviar dinero a casa 

 

Other news 

Venture Beat, 08/21/24, Carl Fansen: Skyfire launches to let autonomous AI agents spend money on your behalf 

FinTech & Financial News, 08/23/24, Staff: Sift Unveils ThreatClusters: Revolutionizing Fraud Detection with Industry-Specific Consortium Models 

PayPal Expands Strategic Partnership with Adyen to offer Fastlane in the U.S. – Adyen 

Amazon in India considers splitting off payments app (finextra.com)