Friday Briefing: Colombia moves ahead with Open Finance

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August 5, 2022

#TopStory 🔝

Open Finance in LatAm: Colombia makes progress while Mexico stalls

Colombia took a big step towards open finance last week, and plans to have rules in place within a year. The news came as sources in Mexico say progress has stalled in the implementation of open banking in the country.

• Colombia’s Finance Ministry issued a decree for the implementation of open finance and the system is expected to be operational by mid-2023.

• The secondary regulations for Open Banking in Mexico are still under review – and it’s likely to be a minute until they are published.

These developments show how Open Finance is moving at different speeds in LatAm, with some countries moving significantly faster than others.

Open finance-based businesses lament
the slow progress of regulations in general in the region, and say that governments – and banks – should be more open on the subject.

The determining factor “is the public sector’s intention to make room for open finance,” says David Ballesteros, manager for Colombia at Belvo, an open finance fintech. “I feel that in each of the governments this is a topic that is on their radar,” he adds.

Likewise, banks must be shown “that it is a win-win” because customers get an improved user experience and banks can attract more revenue through other business models, says Pablo Vicencio, sales manager in Chile at Finerio Connect, a financial solutions company that uses data.

#Strategic Plays 📊

Paystand acquires Yaydoo 

B2B payments fintech Paystand acquired its Mexican peer Yaydoo for an undisclosed amount. With this deal, California-based Paystand hopes to be one of the first global B2B blockchain platforms. “While this is Paystand’s first acquisition, we are just getting started with our ambitions,” Jeremy Almond, CEO of Paystand posted on LinkedIn. Yaydoo also announced the deal, calling it a merger.

Nequi receives financing company license

Grupo Bancolombia’s digital wallet, Nequi, received authorization from the Colombian regulator to become a financing company. The license allows the wallet to take deposits and grant loans independently from the bank. Nequi has 13 million customers, making it one of the most widely used wallets in the region.

Bnext closes its doors in Mexico

The Spanish neobank Bnext disabled the accounts of its 230,000 users in Mexico, as a result of the latest regulatory changes in the country. The neobank was a client of Cacao Paycard, a company that failed to obtain the Mexican fintech license as an Electronic Payment Funds Institution (IFPE). The refusal affected its
clients, including Bnext and Oyster. The latter opted to change its business vertical.

Also…

• Geopagos raised US$ 35 million in a round led by Riverwood Capital. The funds will be used to consolidate
  technological infrastructure at the Argentina startup, and compete in the Brazilian market.

• Raincoat, a Puerto Rican insurtech, raised US$ 4.5 million with participation from Anthemis and SoftBank Group’s SB Opportunity Fund.

#Regulation ⚖️

Colombia‘s regulator is poised to allow links between banks and crypto platforms – although banks will have to remind users that the exchanges are themselves unregulated. Also, banks and fintechs are looking forward to more opportunities for credit with the Government’s Green Taxonomy plan.

#Brazil  📈

Nubank and Bitso reach 1 million crypto customers

Just three months after launching cryptocurrency purchases through the app, Nubank managed to attract 1 million customers. For this product, the neobank partnered with Paxos, which acts as a liquidity provider and custodian of cryptocurrencies. For its part, the Mexican unicorn Bitso also reported that they conquered 1 million users in Brazil almost a year after its launch.

Santander: Getnet revenues grow, bank to offer cryptoservices

Santander Brazil plans to offer services linked to cryptocurrencies in the coming months and is evaluating the use of blockchain technology to tokenize assets, it said. Meanwhile, Getnet, the Santander Group’s acquirer, posted net income of R$176 million (US$33.2 million) in the second quarter of the year, up 33% from the
same period last year.

Also…

• Next acquired Aarin, a fintech provider of open finance technology.
• Credz, raised US$
  75.6 million in the Brazilian capital markets, through the issuance of credit rights investment funds (FIDC).
• NG.CASH, a digital wallet targeting Generation Z, raised US$ 10 million in a seed round led by Andreessen Horowitz and Monashees.
• Conta Simples, a B2B solutions fintech, acquired Hackr Ads, a platform that manages digital ads. It will thus offer this service to its more than 63 thousand corporate clients.

#iupanaExclusive 🔥

This week we reviewed the most popular digital wallets in LatAm, where PicPay, Nubank and Mercado Pago stand out. In addition, we looked at the paths that wallets are following to make the business profitable.

• Free solutions are looking towards credit products to make the business model sustainable.
• Brazil is the country with the most used wallets in the region.
• Bank spin-offs such as Davivienda in Colombia and BCP in Peru also stand out, with the Daviplata and Yape brands respectively.

See the most popular digital wallets in Latin America, here.