Miranda’s Weekly Mex FinTech Monitor

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. 

 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. 

 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.   

 Other news  

Forbes Colombia, 10/09/2023, José Caparroso: Proptech colombiana Macondo es comprada por la fintech Bricksave 

Bloomberg Línea, 10/13/1023, Daniel Guerrero: SIC fijó reglas para que las fintech puedan entregar créditos en Colombia 

 

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.   

 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.  

 Other news