Doubts surround Mexican Fintech Law 2.0
Pressing issues on the political agenda in Mexico could get in the way of an industry initiative to introduce a fintech law 2.0 that would lead to improvements to the process for authorizing new businesses approval processes, technology, and business models.
“I don’t want to be pessimistic but realistically I would not expect” changes in this area, said Victoria Albanesi, founder of Tech Legal Consulting. She was speaking at a virtual event on legislative priorities for Latin America in 2023 that was sponsored by iupanaPro, the iupana information
service specialized in digital finance regulation.
Mexico’s fintech association has been publicly stressing the need to update the existing legislation. Enacted in 2018, the law basically governs rules on electronic wallets and crowdfunding, which limits the development of other business models and has seen fintechs seek out legal subterfuges. “Any legislative process or modification is long-term and requires a lot of effort from the sector to achieve consensus,” including political agreements, said Albanesi.
Congress also has higher priorities. Lawmakers are embarking on major legislative
initiatives that have captured the public’s attention, such as an electoral reform promoted by President Andrés López Obrador and the governing Morena party, which has a parliamentary majority.
Albanesi spoke on a panel with other leading Latin American industry experts at the event “How will fintech rules change in 2023?” organized by iupanaPro. Read more about it here, or watch a full recording of the
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AI, metaverse, and fraud in the financial industry spotlight in 2023
This week, we were in Miami covering the 2022 Mastercard Innovation Forum for Latin America and the Caribbean. The panels at the two-day event focused on trends for digital payments, progress with new technologies such as the metaverse, web3 and artificial intelligence (AI), and their implications for the sector.
One of the concerns expressed during the conference is that while virtual services
gain ground, security and compliance challenges are also increasing. “What’s growing faster than e-commerce in Latin America is e-commerce fraud,” said Ron Hynes, CEO of Vesta, a payment fraud prevention platform that has a partnership with Mastercard.
On the other hand, there is also a growing need for actors in the AI industry to tackle data governance and compliance challenges, as machine learning algorithms become ubiquitous. “Let’s talk about equity, for example. There’s no standard, no established point of reference, there’s no definition, and everyone presents their own set of policies and their good will,” said
Navrina Singh, founder and executive director of Credo AI, a platform that supervises AI risk.
On Monday, we will bring you a round-up of the new payment methods that caught the public’s attention at the event, including payments with crypto, tokenization, tap on phone and click to pay.
- Colombian payment platform ePayco expands its alliance with PayPal. After seeing good results from its tie-up in Colombia, the companies will branch into Ecuador and Peru during the first quarter of 2023. The service allows customers to make withdrawals from their international sales directly from their bank account in their country of residence.
- DaviPlata, the Davivienda Group’s digital wallet, launches its contactless payment function in Colombia.
- Brazilian superapp Inter has joined Amazon’s Payment Service Providers Program (PSP), allowing customers in Brazil that are sellers on Amazon in the United States to receive and send payments directly to their Inter accounts.
- Mynt, the cryptocurrency investment platform owned by Brazil’s BTG Pactual, presents a functionality in its app that allows users to transfer cryptocurrencies, such as bitcoin or ether, from other platforms to their Mynt account and vice versa.
Destácame closes US$10m round
Chilean fintech Destácame, a personal finance management platform, closed a Series B investment round for US$10 million led by Banco Santander, which obtained a minority stake in the fintech.
Nubank founder and CEO David Velez has terminated a compensation agreement in a move that will save the digital bank about US$356 million. The now defunct deal stipulated that Velez would receive compensation when Nu’s shares exceeded $18. The fintech said the decision supports “the company’s strong focus on efficiency in the current macroeconomic environment.”
The troubles affecting the cryptocurrency sector have tarnished its reputation. However, Brazil, probably the largest crypto laboratory in the region, is not ready to abandon virtual assets. Companies are breaking ground with new business models based on digital currencies and blockchain, and they’re already achieving results.
- Startups have success with models based on blockchain, web3 or cashback with bitcoins.
- They are also exploring ways to counter the adverse effects of crypto busts.
- Their strategy is to focus on financial services and steer
clear of the more volatile investment model.
Learn more about the new crypto use cases in Brazil in this week’s iupanaExclusive.