Fintechs make dash for remittance cash
The decision by Ualá to enter the remittance vertical in Mexico through an alliance with local lender ABC Capital is part of an emerging trend in LatAm, where a handful of fintech companies have entered the market.
The competition for a slice of the region’s massive money transfer movement, which totaled US$131 billion in 2021, has attracted the global fintechs such as Revolut and Wise, which are looking to lure customers with faster and cheaper remittances. And everything indicates that new players will continue to explore the vertical.
“International remittances in Latin America have become a relevant market,” Tomás Bercovich, CEO and co-founder of Global66, a fintech specialized in this segment, told iupana. Traditional banking and its virtual channels fulfill the need for local services such as digital wallets and payments “but fail to satisfy the
demand for international services,” he said.
The average cost to send US$200 to Latin America is 5.6%, according to the World Bank (WB). The multilateral lender forecasts 9.1% growth in remittances to LatAm this year.
Globalization and greater access to
digital services is driving more people to emigrate and work remotely as so-called digital nomads, says Bercovich.
“Now people are in constant movement, traveling, migrating, which makes this type of service increasingly necessary,” he says.
Among companies warming up on the sidelines is Chek, Banco Ripley’s digital wallet in Chile, which plans to launch a money transfer service in the coming months.
We will explore Chek’s remittance proposition in our iupanaExclusive on Monday.