Friday Briefing: Argentina and Mexico bolster fintech oversight

March 4, 2022

#TopStory 🔝

Argentina and Mexico bolster fintech oversight

Latin American regulators are stepping up supervision of the fintech industry, with Argentina seeking traceability in wallet transactions while Mexico takes steps to monitor the sector more effectively.

The Central Bank of Argentina
(BCRA) issued technical requirements for digital wallets with the aim of curbing fraud. And in addition, wallets will now have to submit records of their interoperability.

“Traceability within a PSP [payment service provider] has
value for the regulator, which needs to understand and have information about the entire business chain,” Mónica Miño, a public accountant specializing in compliance and anti-money laundering, told iupana. 

Financial entities as well as PSPs that provide digital wallet services will have to draw on mechanisms to detect suspicious or unusual user activity.
It poses a challenge for the sector since the companies only have six months to comply with the new rules, which could increase costs. In the long run, however, the changes will prove to be very effective for strengthening wallets, Miño said. 

In Mexico, meanwhile, the National Banking and Securities Commission (CNBV) published new operating regulation and created new departments to specifically supervise fintechs. 

“Firstly, they are bringing financial technology institutions under regulatory supervision and oversight,” said Jorge Luis Reyes, a compliance lawyer at Dock, a payment technology firm.   

“A general directorate for fintech supervision has been created within the commission’s structure” and “explicit recognition has been given to the Inter-Institutional Committee,” he added.

The Inter-Institutional Committee is made up of six members, with two representatives each the Finance Ministry, Banco de México and the CNBV.

#Investments 💰

Itaú BBA to invest in venture debt

Brazilian investment bank Itaú BBA is working on a venture debt strategy through its “tech niche” division, which accelerates and provides training for startups. The bank plans to approve 20 to 30 startup loans this year of between US$900,000 and US$5.8 million each.

Leasy raises US$ 17m for auto finance

Leasy, a Peruvian car loan fintech, raised US$15 million in debt and US$2 million in equity in a round led by Magma Partners. The fintech uses applicants’ travel history to evaluate loan requests, a practice that’s growing in the region and is being applied by companies including Credicorp’s Mibanco and the Spanish fintech Lana.

#Wealthtech 📲

Mexico’s Flink buys Colombia’s Ualet 

Mexican wealthtech Flink acquired Ualet, a Colombian digital broker, as part of its international expansion plans, which also include Peru, Argentina and Chile. The acquisition took place in 2021 and Flink is awaiting approval
from the Colombian Financial Superintendency to start operations. 

“We expect to see similar growth to the what we saw in Mexico when we launched the trading service to acquire fractions of shares on the New York Stock Exchange and in less than one year we managed to have one million active clients on the platform,” Flink’s CEO and co-founder Sergio Jiménez told iupana.

Colombia’s Trii starts operations in Peru  

Trii, a Colombian wealthtech, started operations in Peru in partnership with Lima-based brokerage Kallpa SAB. The tie-up allowed Trii to launch its product in compliance with local regulations.

#Crypto 💸

A55 offers loans for startups using stablecoins 

A55, a Brazilian fintech providing credit solutions to startups, carried out its first lending operation through a decentralized finance protocol (DeFi) using the stablecoin USDC, which is backed by the US dollar. Lending
with digital currencies is a trend that’s gaining ground, with Mexican fintech Delt.ai announcing a similar initiative last month.

#Cards 💳

Tribal and Visa partner to diversify corporate credit

Corporate payment solutions fintech Tribal signed an agreement with Visa to issue corporate credit cards in nine countries in the region, including Mexico, Brazil, Colombia, Chile and Argentina. The agreement seeks to expand payment acceptance levels, boost corporate credit lines and improve card distribution. 

Global 66 opens waiting list in Peru 

Chilean financial services platform Global 66 set up a waiting list for a new prepaid card in Peru. The fintech focuses on low-cost remittances and recently introduced a multi-currency digital wallet. It raised US$12 million in a series A round in July last year. 

#People 🙋‍♂️🙋

Luis Escobedo is the new CTO of Aplazo 

Buy now, pay later fintech Aplazo hired Luis Escobedo, who worked for more than 2 years at Credijusto, to lead its technology division. “The next role that will define my career,” Escobedo wrote in announcing his new job.

#iupanaExclusive 🔥

Brazilian digital bank Inter plans to list shares on Nasdaq this year and position itself as a multi-service platform in the United States. And while its international expansion is taking shape, the bank continues to strengthen its super app strategy at home.  

• As part of Inter’s overseas strategy, it acquired USEND, a U.S. international payments fintech.  
• Its Nasdaq listing was scheduled for late last
  year but was suspended and is now being recalibrated.
• In Brazil, Inter’s app offers financial and non-financial products, and it wants to export that model to the U.S. 

Learn more about Inter’s positioning and consolidation strategy in this week’s iupana exclusive.

Over and out