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MI’s Mex FinTech Monitor – September 2, 2024   

Miranda’s Weekly Mex FinTech Monitor – September 2, 2024   

Mexico FinTech News 

 

Regulators Weigh Caps on Interchange Fees

A working group formed by the Ministry of Finance (SHCP), Banxico and CNBV is analyzing whether to impose new caps on fees charged in the card payment ecosystem, in the face of high costs. According to a 2023 Cofece report, commissions in Mexico amount to 1.36%, compared to just 0.2% in some European countries. We believe such a cap could have material negative implications on some fintech players that rely on these fees for the bulk of their revenues, though we also note discussions are at an early stage

negative implications on some fintech players that rely on these fees for the bulk of their revenues, though we also note discussions are at an early stage.

El Economista, 08/29/24, Sebastián Estrada: Autoridades analizan tope de comisiones en medios de pago.

 

Oxxo and BBVA Launch Cardless Cash Withdrawals

BBVA customers will now be able to withdraw up to $3,000 in cash at any of Oxxo’s 22,000 branches, by way of a QR generated on the bank’s app. With this agreement, BBVA expects to double within the next 18 months the number of cardless withdrawals its customers make, currently about 13 million transactions per month. We believe this announcement could signal Oxxo’s reticence to seek a bank license of its own in the foreseeable future, as making its branch network available to a potential competitor would make little sense.

 

Sofipos Face New Regulations; Some Want in on Payroll Management

Mexican financial institutions known as Sofipos are set to go through new regulations to eliminate unnecessary fees and promote digital financial inclusion. The CNBV is leading these efforts to make financial services more accessible for low-income populations. Regulations will focus on reducing commissions and enhancing the digitalization of financial products offered by Sofipos. On the other hand, some Sofipos have called for changes in regulation so that they can offer payroll accounts, a service which can currently only be offered by banks.

 

Open Finance regulation on hold as “certain sectors not ready”

Speaking at the Sofipo association convention, CNBV’s regulatory policy VP Lucía Buenrostro said implementation of open finance regulation has been paused to “protect certain sectors that weren’t ready”. The regulation calls for the mandatory sharing of certain transactional data in an automated manner.

Finsus acquires payroll lender Pulpi

Finsus, which recently announced it would seek a bank license, said this acquisition would allow it to serve some 70k workers with monthly salaries ranging from $15k to $75k. An eventual bank license would allow Finsus to also offer payroll accounts.

 

Fintech unicorn Jeeves to request Sofipo license

The company, which provides loans, credit cards and payments solutions with a focus on start-ups, announced it would seek a Sofipo license; it ruled out acquiring an existing license. This is somewhat of a departure from other players that are seeking a bank license, likely due to Jeeves’ focus on companies as opposed to consumers.

El Economista, 08/28/24, Sebastián Estrada: El unicornio Jeeves va por una Sofipo.

 

Clip Expands Offering with Digital Account After US$100 Million Funding Round

Clip has expanded into the financial services sector by launching a digital account offering. This move comes after the company secured US$100 million in a funding round led by General Atlantic. While the new funding “valued” the company at US$2bn, we understand this was likely achieved via a high-yield preferred note convertible at a valuation of US$2bn, with most of the value of the note in the high interest rate on the preferred, not in the out of the money convertible element. The new digital account aims to provide small and medium-sized businesses with greater access to financial tools, including managing transactions, accessing credit, and streamlining financial operations. The company also launched a new payment terminal.

 

Mexican Cryptocurrency Users Lead in Diversification Across Latin America

According to a report by Bitso, Mexican cryptocurrency users are the most diversified in Latin America. The report highlights that Mexican users hold a wider variety of cryptocurrencies than those in other Latin American countries. Bitso attributes this diversification to a combination of factors, including increased financial literacy, access to a broader range of digital assets, and the desire to mitigate risks by not concentrating investments in a single cryptocurrency.

Other news

 

 

LatAm FinTech News

Stori Invests $100 Million in Colombia to Strengthen Financial Inclusion

Stori has announced a US$100 million investment in Colombia. The investment will focus on expanding Stori’s operations, increasing its customer base, and improving access to credit and other financial services for underserved populations in Colombia.

El Universal, 08/29/2024, Antonio Hernandez: Stori invierte en Colombia Other Sources:  El Economista, Reforma

 

Nu Introduces Nu+ Recognition Program with a Unique Approach

Nu has launched Nu+, a new recognition program in Colombia that offers a different approach compared to traditional recognition programs. Instead of focusing on points or rewards, Nu+ provides personalized experiences. The program includes services like points redeemable for cash and reductions in interest rates, understanding and catering to the unique circumstances of each client.

Other news 

 

 

Global FinTech News 

 

India’s DMI Finance Lands a Further $334m Investment from MUFG

DMI Finance, an Indian digital finance company, has announced an equity investment of US$ 334 million from Mitsubishi UFJ Financial Group. The funds will be used to upgrade DMI Finance’s technology platform, scale its operations, and increase its footprint in the Indian market. MUFG’s investment underscores its confidence in DMI Finance’s business model and the growing demand for digital financial services in India.

FinTech Futures, 08/28/24, Cameron Emanuel-Burns: India’s DMI Finance lands a further $334m investment from MUFG

 

CloudPay Secures $120m Funding Round Led by Blue Owl Capital

The company has raised US$120 million in a funding round led by New York-based asset manager Blue Owl Capital. The new funding will enable CloudPay to enhance its customer offerings, advance its tech solutions, and further utilize AI to improve process automation and data management. Additionally, the company plans to upgrade connectivity through API solutions to better integrate its global payroll, payment, and HCM ecosystem.

FinTech Futures, 08/28/24, Cameron Emanuel-Burns: CloudPay secures $120m funding round led by Blue Owl Capital

 

The Fallout from Bolt’s Aggressive Fundraising Attempt Has Been Wild

Bolt is experiencing significant challenges following an aggressive fundraising effort that has had far-reaching consequences. The company, which previously raised substantial funds at high valuations, is now facing backlash as it struggles to meet the lofty expectations set by its rapid capital acquisition. The aggressive approach has led to internal turmoil, including layoffs and leadership changes, as well as skepticism from investors and market observers.

Other news

The FinTech Times, 08/29/24, Richie Santosdiaz: New Capital City, Strong Fintech Adoption, Fintech in Indonesia

Research reports and consulting on the latest developments in Mexican politics, media, judiciary, financial markets, energy, fintech and much more, prepared by our own staff and by outside expert contributors.

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