Fintech News MX - July 2023
Gonzalo Sánchez
Senior Fintech Specialist and Content Strategist / Advisor / Angel Investor
Hi Fintech Enthusiasts,
Welcome to the monthly edition of Fintech News MX! In this edition, we will review the highlights from the weekly summaries published by?FintechExpert ?during July 2023.
Stay ahead of the game with the latest updates in the Mexican Fintech industry. We've got a plethora of exciting news for you this month! From the launch of new apps, the announcement of new banks and international expansions to investments, acquisitions, and regulatory developments, the Mexican Fintech landscape is buzzing with activity. Let's dive right in!
Stay informed and don't miss out on the latest fintech news! Subscribe to our weekly newsletter in Spanish at?https://fintechexpert.mx ?and join us at the forefront of the Mexican fintech scene.
???? Hey Banco to Become an Independent Bank and Launches Hey X Investment App for Millennials
Hey Banco, a Fintech firm under Banregio, is set to become an independent bank and launch a new app called Hey X. The app will enable users, especially millennials, to invest in fractional shares of US companies. This move complements their existing offerings, which include investments in Mexican stocks and the International Quotation System. Hey Banco also plans to expand internationally, offering debit accounts and investments to foreign customers, with future plans for credit services.
?? Openpay México by BBVA Surpasses 360M Annual Transactions
Openpay, the digital payment firm of BBVA Group, reported an astounding 360 million annual transactions in March 2023, driven by technological innovation and strategic alliances. Since 2017, Openpay has experienced remarkable growth, expanding its operations to Colombia, Peru, and Argentina, besides Mexico. It has become a key component of BBVA's payment strategy, especially in Mexico, where new customers accounted for 40% of the bank's product sales in 2022.
?????????? Puntored from Colombia Expands to Mexico with Acquisition of Puntored | Gestopago México
Colombian financial and technology services company, Puntored, has expanded its presence in Latin America with the acquisition of Mexican fintech, Gestopago. This marks Puntored's first acquisition outside Colombia and signifies a significant step in its expansion strategy. Gestopago, processing around 10 million transactions per month, complements Puntored's offerings and extends its reach in Mexico, a country with great potential for digital payment services due to its low levels of banking compared to Colombia.
???? E-commerce in Mexico Soars with Sales over $600 Billion
In 2022, Mexico experienced impressive growth in e-commerce, registering sales of over $600 billion pesos, representing a 23% increase compared to the previous year. These sales contributed around 6% to the country's GDP. The major players in terms of sales volume were Mercado Libre, Amazon, and Walmart Mexico. The online food segment is expected to see considerable growth, with projections to double its revenue between 2023 and 2027.
?? mattilda. Secures Series A Funding
Mexican startup, Mattilda, has successfully closed its Series A funding round with $19 million USD led by GSV Ventures and backed by Fintech Collective and Dila Capital. The funds will be used to expand its collection management and payment processing solutions for private schools. Mattilda automates the collection process, offers various payment options to parents, and provides school-based loans based on future income, providing greater liquidity and growth planning opportunities.
???? Amparo Lawsuit Challenges Comisión Nacional Bancaria y de Valores and Banco de México in Open Finance Inaction
An amparo (legal protection) has been filed against the National Banking and Securities Commission (CNBV) and the Bank of Mexico (Banxico) for their lack of action in publishing rules for the Open Finance model. The plaintiff, Juan Pablo Ybarra Llamas, argues that the absence of these rules limits his access to financial services according to his needs and preferences, violating his constitutional rights. So far, only rules for "open financial data" related to ATMs have been published, despite the 2018 Fintech Law stipulating the need to share transactional data and aggregated information.
???? ?? Stripe 's Operations Center Lands in Mexico
Stripe, the global payment processing giant, has confirmed the opening of a new operations center in Mexico, strengthening its 'nearshoring' strategy in Latin America. With this expansion, Stripe not only reinforces its presence in Mexico but also positions itself as a regional hub, including the United States. The move is expected to create 100 new jobs in the next three years, particularly in areas of cybersecurity and customer support.
???? ?? Revolut to Launch International Transfer Service in Mexico
The British neobank, Revolut, with over 30 million users worldwide, is preparing to launch its services in Mexico. After obtaining its money transmitter license in December 2022, Revolut has opened a waiting list to offer early access to its international transfer service. The fintech aims to participate in the remittance market with the United States and is planning massive hiring in Mexico, particularly in software development, technology engineering, and fraud prevention.
???? Fintech Investigations Slowed, Fewer Sanctions in 2023
The National Banking and Securities Commission (CNBV) has reduced its investigations into Fintech companies violating the Fintech Law in 2023 due to a high workload and frequent personnel rotation. Only three fines have been imposed this year, totaling 1.7 million pesos. Despite the slowdown, CNBV has authorized 59 Fintechs to operate in Mexico. The delay in reviewing documentation due to the COVID-19 pandemic remains a significant factor in the process.
???? Vexi Celebrates Approval of 1 Million Credit Cards
Vexi, the Mexican Fintech firm, has achieved a milestone by approving 1 million credit cards. The company boasts positive unit economics and cash flow, providing fair and responsible access to credit, with 61% of its customers choosing it as their first credit card.
???? minu Enters the Meal and Gas Voucher Market
Salary advance platform, Minu, has announced its entry into the meal and gas voucher market, providing additional benefits to its users and partner companies. These services will be offered without additional commission costs. Minu aims to issue 250,000 voucher cards by the end of the year, and currently, Minu vouchers are accepted in over 500,000 establishments in Mexico.
?? Prometeo Launches Account Validation Service
Prometeo, the Open Banking leader in Latin America, has introduced its new Account Validation service. The system allows businesses to verify bank account information before making a transfer or incorporating a new customer, reducing errors and fraud significantly. The service is currently available in Uruguay, Mexico, Peru, and Brazil.
???? Vector Casa de Bolsa Launches AI Team and Introduces SofIA
Vector Casa de Bolsa, a renowned Mexican financial institution present in ten countries, has made a significant leap in the industry by forming the first Generative Artificial Intelligence (AI-Gen) team in Latin America. The new unit aims to optimize operations and improve the investment experience. Additionally, Vector Casa de Bolsa announced the creation of SofIA, an AI-driven virtual assistant.
???????? Nuvocargo Secures $36.5 Million Funding
Nuvocargo, a logistics and Fintech startup, has raised $36.5 million in a funding round led by QED Investors. The funding will allow the company to expand its share in cross-border freight between the United States and Mexico, with the goal of covering over 70% of this market. The recent nearshoring trend has prompted the relocation of production chains from Asia to North America, driving Nuvocargo's growth.
?? Fintech App Usage Surges by 54% in Latin America
According to the Mobile App Trends 2023 report by Adjust , the usage of Fintech applications in Latin America has seen an impressive 54% growth compared to the previous year. Latin America now outpaces Europe, the Middle East, Africa, and Asia-Pacific in Fintech app usage. Notably, Brazilian apps Nubank and Caixa Tem were among the most downloaded Fintech apps in 2022.
?? BanCoppel Partners with Temenos for Technological Innovation
BanCoppel, a major Mexican financial institution belonging to Grupo Coppel, has joined forces with Temenos, a Swiss leader in banking software. This partnership aims to drive innovation in the banking services ecosystem, allowing BanCoppel to efficiently scale and offer integrated, accessible banking services.
???? dmX Receives $1 Billion MXN from IFC - International Finance Corporation for Credit Opportunities
Fintech company dmX has received a loan of $1 billion MXN (around $50 million USD) from the International Finance Corporation (IFC), a part of the World Bank Group. This loan seeks to provide increased credit opportunities for retirees and pensioners in Mexico, a segment often overlooked by traditional financial institutions. Furthermore, with IFC's support, dmX plans to expand its business to serve women through the "Banking on Women" program, which has already benefited numerous women-led SMEs in 70 countries.
Mexican financial services platform Konfío has successfully renewed its credit line with J.P. Morgan for $1,520 million MXN, valid until 2025. The company has also increased the maximum amount offered through its Business Credit product by 66%, further supporting SMEs in Mexico. To date, Konfío has approved more than $17 billion MXN in financial solutions for over 70,000 businesses in Mexico.
???? Mexican Banks Accelerate Digital Authorization Process
Mexican digital banks are streamlining their authorization process, taking an average of 458 days, while Fintechs require around 735 days. This time gap is attributed to varying regulatory requirements. However, recent changes in authorization processes by the National Banking and Securities Commission (CNBV) are expected to reduce approval times in the future.
Grupo Financiero Banorte has announced a delay in the launch of its new digital bank, Bineo, until 2024. The postponement is not due to technical issues but strategic considerations, as Banorte defines its product offerings and fine-tunes its business plan. The bank aims to create a multifunctional digital bank, emphasizing internal strategic decisions over regulatory authorities' actions.
领英推荐
?????? ♂? American Express Mexico Shifts Strategy: No More Banking
American Express Mexico has made a strategic shift by relinquishing its banking license and consolidating its operation under the legal entity of American Express Company Mexico, S.A. de C.V. This move allows the company to enhance internal synergies, improve efficiency and agility while maintaining its signature customer support and services. The transition has received approval from the National Banking and Securities Commission (CNBV) and was published in the Official Gazette of the Federation.
???? Bitso Teams up with Stellar Development Foundation for International Payments
Mexican Fintech Bitso has integrated with Stellar, a global network facilitating international transactions, to expand its payment services. This partnership will enable Bitso to establish new transaction corridors between Latin America and Europe, becoming part of Stellar's Anchor network. The joint solution, developed in collaboration with the Stellar Development Foundation (SDF), aims to enable fast and affordable transactions for businesses worldwide, promoting cryptocurrency adoption and global financial empowerment.
???? Sociedad Hipotecaria Federal to Launch New Digital Mortgage for Affordable Housing
The Mexican Federal Mortgage Society (SHF) is preparing to launch a digital mortgage to promote the acquisition of homes valued under $1.5 million MXN. The program targets both salaried individuals and self-employed individuals with a minimum monthly income of $21,000 MXN. It is expected to begin operations in the second half of 2023, in collaboration with the Housing Banking Operation and Financing Fund.
???? Farewell to Checks: Usage Drops by 10% in Mexico
According to a recent report, check usage in Mexico has decreased by 10.5% compared to the previous year, with small and medium-sized enterprises (SMEs) being the main users. Despite the decline, checks remain a popular payment method, with 25,840,327 checks issued in the first quarter of the year, totaling 934,259 million MXN. Miguel Valero, the Executive Director of Digital Banking at Banorte, emphasized that while checks are declining, there is still a long way to go before they disappear completely.
???? CoDi: Commission Saver for Small Businesses
CoDi, a digital payment system launched by the Banco de México (Banxico) in 2019, has allowed small businesses to save up to $84,000 MXN per year by eliminating the need for traditional banking terminals. As of now, 1.46 million accounts have made at least one payment using CoDi, and 896,811 accounts have received at least one payment via QR codes. Small businesses like cafes, bars, and market stalls have been the primary beneficiaries of this system.
?? Bank Claims: A $12.5 Billion MXN Hiccup in Digitalization
The Mexican banking sector is facing a significant increase in claims related to digital services, totaling over $12.5 billion MXN and more than 2.6 million complaints until March. While this presents a challenge, the digitalization of financial services has positively impacted financial inclusion, with a 130% increase in mobile financial services users and a 60% increase in businesses using internet banking services over the past two years.
????? Alert in Fintech: Rise in Cyber Fraud in Mexico
Sistema de Transferencias y Pagos - STP has warned of a notable increase in cyber fraud in Mexico, particularly through social media and digital payments. In 2022, there was a rise of 390,000 controversies related to possible fraud, according to data collected by Comisión Nacional para la Protección y Defensa de los Usuarios de Servicios Financieros (CONDUSEF) and provided by STP. To counter this, STP has shared tips to avoid falling victim to fraud, including enhancing online operation security, verifying the identity of sellers or entities before making payments, avoiding financial operations through links sent on social media, and regularly reviewing account statements for possible fraudulent activities.
???????? Mexican Banks Reinventing Themselves in the Fintech World
The Mexican banking scene is witnessing a vigorous digital transition. New competitors in the sector, such as Spin by Oxxo and Brazilian Nubank, have experienced significant customer base growth, prompting traditional banks to ramp up their technological endeavors. These traditional banks are innovating with their digital propositions, leveraging their banking licenses and the protection of the Mexican Deposit Insurance Institute (IPAB). While new players like Spin and Nu, backed by large corporations and massive physical presence, are proving to be formidable competitors for traditional banks, traditional banks still hold advantages, such as the ability to grant loans and an established brand with a wide customer base.
????? OXXO Plans to Launch Credit and Insurance Products with Spin
Spin by Oxxo, which has seen its user base grow by an impressive 142.1% since 2022, reaching 7.6 million customers in the second quarter of 2023, is considering introducing additional services like credit and insurance to its application. Eugenio Garza, CFO of Femsa, the parent company of Oxxo, mentioned that the company is focused on ensuring an optimal user experience with its current wallet before expanding its service range. Spin has demonstrated a monthly compound growth rate of 7.6%, with 75.8% of its users being active.
Rappi, the renowned delivery app backed by SoftBank, is collaborating with Mexican fintech R2 to provide loans to restaurants in Mexico and Colombia. The initiative targets establishments that have sold through the Rappi app for at least three months, with a goal of granting up to $60 million MXN in loans. The new program initially focuses on Rappi's 50,000 restaurant clients in Mexico and 30,000 in Colombia, with potential expansion to other markets.
???? Jeeves Ventures into International Transfers Market
Jeeves, a Fintech facilitating various payments through corporate cards, has announced its entry into the international transfers market. This move comes in response to the growing trend of business relocation to Mexico and aims to meet the needs of businesses with an international presence. Jeeves will have the capability to execute cross-border payments in more than 100 countries, including Mexico and other Latin American countries. The firm expects to compete in the Mexico-United States corridor and foresees strong adoption of this solution in the coming months.
???? TruBit Aims to Transform Crypto Commerce in Mexico with New Card
TruBit Card promises an easy and effective way to spend and earn cryptocurrencies in everyday activities. The benefits include a 5% Bitcoin cashback, cash withdrawals at ATMs, direct spending of cryptocurrencies, no annual fee, and the security guarantee of 萬事達卡 . The waiting list for the card is open, and its first physical cards are scheduled to be issued in the third quarter of 2023.
???? Mercado Pago Targets Half a Million Cards
Mercado Pago is on a mission to distribute half a million credit cards in Mexico, issuing an average of 1,600 cards daily. The company's strategy focuses on preventing customers from incurring unsustainable debts, committing to offer healthy credit lines. Although specific data on customer delinquency rates have not been revealed, the Fintech reports a high utilization rate of 80%.
?????????? Capitaria Latam Enters the Mexican Market
Chilean trading Fintech Capitaria has launched operations in Mexico, extending its presence to a fourth market after Chile, Peru, and Uruguay. The company aims to attract 250 clients in its first year in Mexico and handle transactions worth $500 million USD, representing 10% of its operations in Chile. Capitaria's CEO, Pedro Torrealba, notes that the profile of the Mexican brokerage industry is similar to the Chilean market, and with a market ten times larger, they see significant growth potential.
???? BBVA en México Showcases Leadership Position in Q2
In its Q2 2023 report, BBVA México highlights significant growth in itsloan portfolio, experiencing an expansion of over $157 billion MXN in the last year. This 11.2% annual growth has been primarily supported by portfolios linked to households and families, as well as increased dynamism in the SME segment. BBVA México's constant innovation and digital development have resulted in a 19.1% annual growth in its mobile customer base, reaching 21 million customers. Mobile customers now represent 70% of the total customer base, showcasing the bank's successful digitalization strategy. The bank has recorded over 1,686 million transactions in the first six months of 2023, a 24% increase compared to June 2022, with digital transactions accounting for 64% of the total. BBVA México also reported a net profit of $25.808 billion MXN for Q2 2023 and a net profit of $51.540 billion MXN in the first six months of the year, marking a 33.2% increase compared to 2022.
?? OPEN FINTECH OPPORTUNITIES
Join Finnovista's Fintech Mentors Network
We are thrilled to present an exciting opportunity for all financial industry experts out there! Are you ready to make a significant impact on the thriving Fintech ecosystem? Look no further! Finnovista is inviting you to become a part of its esteemed Operator's Network.
More info: https://www.finnovista.com/mentores-finnovista-construyendo-puentes-hacia-el-exito-de-las-startups-fintech /
FINNOSUMMIT Mexico 2023: The Leading Fintech Event
FINNOSUMMIT, the premier fintech event, returns this year after a successful previous edition. With over 1,700 attendees from 26 countries, the event will take place on September 26 and 27 in Mexico City. FINNOSUMMIT serves as a vital platform for connecting participants in the fintech industry, including innovators, entrepreneurs, investors, and media. It offers the opportunity to strengthen connections within the ecosystem and learn about the latest industry trends.
More info:?www.finnosummit.com
Job Opportunities at?Finnovista : Marketing Manager
Finnovista is currently hiring a Marketing Manager for its acceleration program in Mexico City. If you have experience in marketing and communication strategies, a passion for fintech, and an innovation-oriented mindset, this is an excellent opportunity to contribute to the vibrant fintech sector in Mexico.
Apply here:?https://apply.workable.com/finnovista/
Thanks for reading... Don't miss out on the latest fintech news and developments ????! Subscribe?FintechExpert ?weekly newsletter in spanish at?https://fintechexpert.mx/ ?to stay updated on the latest trends and insights in the Mexican fintech ecosystem.