This week we tell you that interoperability begins in Peru. Also, startups in LatAm remain uneasy despite the purchase of Silicon Valley Bank by First Citizens. In addition, regulation for digital payments remains a priority for the ecosystem.
All this and more in our weekly summary .
You may also be interested in our main note: Credicorp proceeds with caution on crypto
Wallet interoperability starts in Peru
Raffo also said the interoperability of the main digital wallets in Peru will benefit the entire ecosystem. The A deadline expires today for banks to make their wallets interoperable, bringing together Credicorp’s Yape with the Plin payment rail, which is used by rival lenders BBVA, Scotiabank and Interbank. Combined, the wallets have more than 15 million users.
“The war is against cash. It’s not against Plin […]. There’s enough market in cash,” Raffo said.
#Strategic Plays
SVB takeover calms the markets, but for how long?
First Citizens Bank’s deal to buy the assets of Silicon Valley Bank (SVB) brought some calm to financial markets this week.
U.S. regulators used an insurance fund of about US$20 billion to support First Citizen’s acquisition of a significant portion of the savings and loan portfolio of the renamed Silicon Valley Bridge Bank. The buyer also received a line of credit from the Federal Deposit Insurance Corporation (FDIC), which agreed to share losses from commercial loan defaults.
However, concerns about the global economic recession and its impact on the banking and fintech sectors will continue to weigh on investor decisions.
“A degree of calm has returned to markets over the last week, but some sense of nervousness persists. The hunt is on for the next shoe to drop,” wrote British consulting firm Capital Economics in a note to clients.
“Crucially, these smaller banks are also experiencing pressure on their deposit base. The immediate focus has been on the risk of deposit flight caused by concerns about the health of mid-tier banks in the wake of the collapse of the SVB,” it adds.
Against this backdrop, the big banks and fintechs that have moved fast to capture floating deposits have come out on top. However, the fall of the fintech bank will continue to have an impact on risk perception.
Payment regulation remain the priority for the ecosystem
A snap poll of our readers reveals that digital payment regulation is the most pressing issue. Open finance rules is the next highest priority, followed by a better understanding of the region’s fintech laws.
Regulation for sandboxes and crowdfunding was assigned less importance while crypto was at the bottom of the list.
A survey late last year of our community —which is made up of company directors, executives, founders, and analysts from the digital finance, fintech, and payments industries— found that regulatory changes was seen as the issue that would have the greatest impact in 2023.
To gain access to iupanaPRO’s exclusive coverage of digital finance regulation, schedule a call with an advisor today.
Pix cements position as most widely used payment method in Brazil
Pix ended 2022 having notched up more than 24 billion transactions, making it the most used means of payment in the country, more than debit cards, bank slips, checks, and money transfers via TED and DOC combined. On average, Pix was used for 66 million operations a day during 2022.
Pomelo Brazil obtains license as payment institution
Argentine financial technology provider Pomelo received authorization from the Central Bank of Brazil (BCB) to operate as a payment institution, specifically for digital wallets and credit cards. The fintech also has a presence in Mexico, Colombia, Chile and Peru.
Court ruling in favor of crowdfunding platform in Mexico
Crowdfunding company PlayBusiness, won a legal case against the restaurant chain Mr. Sushi for breach of contract in connection with a funding campaign, in which the restaurant raised MXN$5.3 million (US$293,000) from 325 investors via the fintech. Mr. Sushi must pay PlayBusiness MXN$7.6 million (US$420,000), according to a Mexican court ruling.
Also…
- In Peru, fintech Máximo teamed up with Mastercard and Binance for the launch of a prepaid crypto card in the third quarter of this year.
#Investments
Qlub raises US$25M to bolster Brazil ops
Qlub, a United Arab Emirates-based fintech focused on payment solutions for bar and restaurant users, raised US$25 million in a seed round, with the participation of Cherry Ventures and Point Nine Capital. The proceeds will be used to consolidate its operations in Brazil.
Pacto de México raises US$4M
Mexican fintech Pacto, a point-of-sale platform, raised US$4 million in a financing round led by DILA Capital and Femsa Ventures. The company aims to develop technology to consolidate its presence in the restaurant sector.
#People
Credicorp announces new directors
Peruvian financial holding company Credicorp announced the appointment of Nuria Aliño and Pedro Rubio to its board of directors. Aliño is a former BBVA executive and digital transformation specialist while Rubio is a veteran of Credicorp and sits on the board of subsidiaries including its investment banking arm Credicorp Capital and BCP.
#iupanaExclusive
Is the buy now, pay later (BNPL) credit model still a sound bet in the current economic environment? This week, we spoke with executives from Kueski and Aplazo, two Mexican fintechs specializing in BNPL, about prospects for the vertical in the context of high interest rates. They say that constant adjustment to risk models can help keep the business model profitable, despite the troubled economic waters.
- The intensive use of technology to flag non-payment risks is essential.
- Both companies differ from popular international BNPL lenders by monetizing through fees on retailers as well as interest on end users.
- Knowledge of the Mexican consumer gives both fintechs an edge.
Find out what Kueski and Aplazo are doing to stay profitable despite the weak economic growth in this week’s iupanaExclusive.