Carlos Valderrama, managing partner at law firm Legal Paradox, reveals that there are about 640 active Fintech platforms based in Mexico. The trillion-dollar economy has introduced regulations that aim to support its booming Fintech sector.
The nation’s authorities are currently reviewing applications from several financial service providers that plan to offer services in the country.
The deadly COVID-19 outbreak has led to a significant increase in demand for digital platforms and services including mobile and digital banking. Many Fintech firms in Mexico and across the globe have reported significantly more revenues, while others have not done so well because their business models didn’t respond positively to the pandemic.
As reported by Born2Invest, Valderrama notes that Fintechs are offering key services to remote workers and one of their main value propositions are to provide personalized solutions and valuable customer services and improved user experience.
He claims that the Fintech sector has experienced “exponential growth” following the Coronavirus outbreak. According to Valderrama, some firms have been “able to generate the growth they had projected in two or five years.”
While attending a press conference, Valderrama said that safe distancing measures (recommended because of the pandemic) have led to greater adoption of contactless payments.
Valderrama noted that his company estimates that from January to May 2020, Mexican Fintech firms secured more than $300 million in funding. Approximately $210 million of this capital came from investment funds and another $118 million was from debt financing, Valderrama revealed.
Emilio A. Cazares and Curtis M. Dombek confirmed in a post recently published by the National Law Review that Mexico has been leading the way in Latin America when it comes to establishing open banking standards. The country has enabled its regulatory authorities to “defer authorizations” for new financial services or Fintech businesses and has provided specialized or provisional licenses to digital currency trading platforms, and for the time being, some might be able to operate as financial technology institutions.
As previously reported, Fintech adoption in Latin and South America is on the rise, with Mexico and Brazil leading the charge.