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These fintech startups are the most innovative

Mexico is establishing itself as one of the strongest startup ecosystems in Latin America. In the last year it has consolidated as one of the most outstanding countries in the field of innovation in Fintech, the financial technology sector.

It is already the largest ecosystem in the region, second only to Brazil, with more than 350 startups. It is one of the main drivers of financial innovation in Latin America. The Mexican ecosystem is currently 2.5 times larger than that of Colombia, the third in the region with 124 new companies, and triple the size of those of Argentina or Chile.

Almost 100 fintech startups per year

This represents a growth of about 100 Mexican startups in the last year, a rate of 40%, slightly lower than the annual growth rate in other major ecosystems in the region, such as Brazil, which grew 48%; Colombia with 52% and Argentina with 56% However, it is above Chile, which grew 22% in the last year.

By contrast, compared to other countries, startups in Mexico have a better failure rate, since it is at 12% compared to the 14% identified in Brazil.

Meet the five most innovative Mexican fintechs

This data is especially important because it indicates that only 29 Mexican startups ceased operations in the last twelve months. The absolute rate, therefore, is positive because there are many more companies that merge than those that disappear in the same period of time

According to analysts, the existence of a lower growth rate compared to other fintech ecosystems, together with a lower failure rate, are indicators of a consolidation phase of Mexican financial startups.

The fact that there are neither great peaks of growth nor relevant indexes of failure is a symptom of a stable ecosystem, which is no longer subject in a dramatic way to the vagaries of the market. It also reflects that a greater number of startups are consolidating their businesses.

Mexico, a hyperconnected country

There is data that helps to understand this bonanza of the Mexican fintech. According to the World Bank, 37% of the adult population of Mexico has access to an official bank account, which implies that the rates of bankization in the country are at 63%, higher than the average in the region (51% ).

37% of the adult population of Mexico has access to an official bank account.

However, the market of consumers and unbanked SMEs continues to be the main target market for new fintech companies in Mexico, According to the recent Finnovista report, 54% of Fintech’s new Mexican companies direct their products and / or services to this segment, a percentage that has increased since 2017, when it stood at 46%.

On the other hand, it is interesting to note that this percentage is higher than that recorded in the rest of the main Fintech ecosystems in the region. In Brazil it is 35%, in Colombia 45%, in Argentina 41% and in Chile 40%.

Mexico City, the great fintech hub

On the other hand, startup accelerators are growing in number and volume of investment in Brazil, Chile, Colombia, Argentina, Mexico and Peru. Large corporations are investing in new companies strategically, or acquiring them, especially when they offer some solution that the internal bureaucracy of large companies would take years to reach or even approve.

Mexico City is the main hub of fintech startups in the country

61% of all Mexicans are in the capital, followed by Guadalajara with 9%, Monterrey with 6%, Mérida with 4% and Puebla with 2%. With respect to internationalization, 83% of companies claim to be operating only in Mexico, while 17% have scaled other countries. This is, without doubt, the weakest point of the Mexican ecosystem of fintech, the scant ambition of entrepreneurs to globalize their companies and products.

These are the five most interesting Mexican fintech startups for PanamericanWorld. They represent in a precise way the enormous dynamism of this sector.

Prestadero

It is the first legally compatible peer-to-peer lending platform, fully operational for the Mexican market. Through Prestadero, borrowers can access the lowest interest rates on consumer loans in Mexico. Lenders can access yields that currently average 16%, while massively diversifying their risk. Prestadero allows users to complete the entire credit operation completely online, which makes it the most efficient origination process for loans in Mexico.

It allows merchants to accept payments on their smartphone or tablet using the Clip card reader. The company offers a portable card reader that adapts to the headphone jack of smartphones and tablets. PayClip was formerly known as BlitzPay, Inc.

Provides a virtual point-of-sale (VPOS) service for e-commerce

This allows online retailers to accept payments from customers at OXXO, which is the largest chain of neighborhood stores in Mexico with more than 11,000 stores located throughout the country.

It is a Mexican Bitcoin exchange company and issuer of MXN balances in the Ripple Network. It is fully integrated with Compropago, a local payment service that allows Bitso users to fund their account with cash at more than 130,000 terminals throughout Mexico, including some 7-Elevens and Walmarts. Bitso charges 1% commission on all operations. It allows the deposits and withdrawals of bitcoin, the withdrawals of Mexican pesos by transfer of SPEI and the use of the platform Ripple gateway will remain free.

It is based on Upholds cloud money storage technology, which allows users to accumulate any currency in dollars. The service is aimed at users who want to store their profit in dollars instead of devaluating it in some other currency. AirTM uses peer-to-peer technology to transfer money: users request dollars and pairing is done with the AirTM ATM that receives the local currency from the senders and returns the dollar amount.


Also published on Medium.

Published inFintech

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