Friday Briefing: Credicorp hunts for cryptocurrency business models

March 11, 2022

#TopStory 🔝

Credicorp hunts for cryptocurrency business models

Credicorp has made Peruvian banking’s first formal advance into the growing crypto industry, after hiring an executive to oversee cryptocurrency and blockchain projects.

Lenin Tarrillo will lead the team in charge of exploring and developing business projects with the aim of including crypto products within the ecosystem
of Credicorp’s flagship business and the country’s largest lender, Banco de Crédito del Perú (BCP). Tarrillo joined the bank at the beginning of this month to take up the newly created post.

“The reason for my incorporation is, in principle, to explore the different opportunities that exist within the crypto world and the blockchain world and transform them into projects that can potentially be legal, safe and can be constituted from within banking institutions,” he told iupana.

The cryptocurrency market is growing in Peru, with some US$42 million invested in
the first half of 2021 through the exchange platform Buda.com, an increase of more than 600% compared with the same period of 2020.

This growing interest in crypto “represents a huge business opportunity for everyone; both for fintechs or startups as well as for traditional businesses such as banking,” Tarrillo says.

#CBDCs  💰

Digital Real use cases set for testing

Nine potential use cases for the digital real will be explored by the Laboratory of Financial and Technological Innovations (LIFT), a collaborative space for entities supported by Brazil’s central bank.

Among them was a project presented by Itaú Unibanco for international payments using a PvP (payment against payment) method. Another, drawn up by Visa in association with Consensys and Microsoft, proposes a regulated DeFi platform that allows Brazilian SMEs to interact with global financial markets.

#Digital Wallets 💳

Ualá and Mercado Libre hit by cybercrime

Some 68 Ualá wallet accounts were emptied in what founder Pierpaolo Barbieri described as isolated cases of phishing or data theft rather than an attack on the Argentine unicorns’ systems.

Meanwhile, Argentine ecommerce giant Mercado Libre said the data of at least 300,000 users was hacked, although there was no leak of user passwords, account balances or the cards of its fintech Mercado Pago.

The incidents raised concerns about wallet security, though these were dismissed by the companies.

#Earnings  📈

Creditas posts loss despite higher revenue

Brazil’s Creditas recorded a loss of US$69.4 million last year, substantially higher than 2020’s, despite the fintech strengthening its insurance and lending ecosystem. Still, the unicorn posted revenue growth of 159% and said it’s on track to cover its costs while it invests in new technology and expanding its portfolio.

#Investments 💰

Flash closes mega round in Brazil

Flash, a Brazilian startup that offers corporate benefits to users of its Mastercard-backed card, closed a series C investment round for US$100 million, led by Battery Ventures and Whale Rock, considered the HRTech sector’s second largest fundraising in Brazil . Flash plans to use the proceeds to expand its platform.

Contabilizei bags US$60m in financing

The Brazilian accounting services company closed a Series C round led by SoftBank, with the participation of Goldman Sachs and Pruven Capital. The fintech, which is focused on SMEs, wants to expand its platform to allow more entrepreneurs to open bank accounts.

Payment fintech Yuno raises seed round

With just two months in the market, the Colombian payments company raised $10 million in seed financing. Established by Rappi co-founder Juan Pablo Ortega, Yuno received the backing of investors led by Andreessen Horowitz, Monashees and Kaszek.

Insurtech Sostengo eyes Central American market

The Salvadoran insurtech closed a pre-seed round of US$1.5 million, boosting its plan to serve the Central American market, where it’s estimated 75% of the population doesn’t use insurance. The fintech’s app allows users to request quotes and take out policies.

#Acquisitions 💸

Next buys Aarin payment platform

Next, the digital bank owned by Brazilian financial group Bradesco, acquired payment platform Aarin, which focuses on enabling invisible payment experiences and open finance. The acquisition will allow nextshop, Next’s marketplace, to add PIX to its list of payment options.

Grupo Primo acquires fintech Grão

Brazil’s Primo, which specializes in financial technology channels, bought Grão, a platform offering training and digital accounts for investing. Primo plans to use to use the acquisition to strengthen its platform and address the online investments vertical.

#People 🙋‍♀️🙋‍♂️

Global66 appoints Peru head

Global66, a digital wallet and remittance fintech, appointed Mario Cruz country manager for Peru. The new hire seeks to strengthen Global66’s commercial and operational strategy for the country. Cruz is founder of digital lending marketplace KontigoBiz and digital wallet Wolet.

#3 questions with… Pablo Dávalos

Where do you see the future of credit fintechs leading in Latam?

In future, these fintechs have a lot of opportunities to become the entry option—even ahead of traditional banks—to access credit. This will be achieved by reinforcing a better user experience and offering convenient financial products.

How is buy now, pay later (BNPL) competing with the credit card?

Initially, the main benefit of the companies that offered BNPL was the reduction in interest but now many banks also offer it. The advantage currently lies in the fact that to access the BNPL service of a startup like Kueski, you don’t need a bank account or credit card to be able to buy on credit.

With services such as KueskiPay the client takes out a product on credit with zero interest, without any need to be banked and with the option of paying every fortnight until the debt is cleared.

What obstacles do companies like Kueski face to inspire the same trust as a traditional financial institution?

More than obstacles, the challenge is to be able to generate trust in customers by correctly communicating what kind of company we are. Ensure that we comply with regulation and maintain contact with the consumer
throughout the process to demonstrate that we operate on time.

Hear more of Pablo Dávalos’ views at a special masterclass this Tuesday: How AI will drive financial innovation until 2030, where he and other experts will talk about AI applied to financial services. 

#iupanaExclusive 🔥

Santander’s PagoNxt is not afraid of big tech

PagoNxt, which serves as an umbrella for the acquiring business Getnet and the Superdigital wallet, is the vehicle with which Santander Group intends to compete—fiercely—in the Latin American electronic payments market.

• In conversation with iupana, policy lead Daniel Pujazón says that the arrival of tech firms such as Apple or Google in the financial arena is an opportunity for
  collaboration, not rivalry.
• The firm sees a mismatch between current regulation and the reality of digital companies: regulation is usually more flexible for financial companies, whether big or small.
• PagoNxt expects real industry breakthroughs with open finance.

Find out more in our exclusive interview

Over and out