This week, Nubank’s talks up its prospects in the Mexican market at its anniversary event in Sao Paulo. Also, we bring live coverage from the Chile Fintech Forum and analyze the Brazilian central bank’s plan to spur the superapp development. In addition, Uber gets a fintech permit in Mexico, and Didi steps up lending.
This and more in your Friday Briefing .
Mexico could become more relevant for Nubank than Brazil
Nubank, which increased its customer base by a third and achieved positive earnings, said this week it expects the size of the Mexican digital banking to potentially exceed that of its native Brazil. It also raised the possibility of branching into more countries in the long run, including the U.S.
“Mexico is a market that has the potential to be more relevant and bigger than Brazil. We’re very enthusiastic about the reception we’ve had,” said Nubank co-founder Cristina Junqueira at an event to mark the neobank’s 10th anniversary.
The digital bank has 79.1 million clients, of which 75.2 million are in Brazil. The number of SMEs and business owners with a Nubank corporate account totals about 2.7 million.
The bullishness surrounding Mexico stems from the fact that its local operation exceeds the metrics achieved in Brazil during its startup there; metrics such as the NPS, or net promoter score, which is used to measure customer loyalty based on the recommendations they make of a product.
“If you compare the Brazil business, after three years, it was nowhere near those levels of penetration, nowhere near NPS levels, and we’ve achieved NPS of over 90 to 94 in Mexico. So we’re very happy with that. And we’re also happy with the speed with which we implement new products,” Youssef Lahrech, president and COO of Nubank, told iupana.
In the next two years, Nu plans to consolidate its presence in the three LatAm markets where it’s already present (Colombia is the other one). However, David Vélez, founder and CEO of the fintech, said the next decade could see the company expand to the United States.
Nu México started operations almost three years ago with a credit card and currently has around 3.5 million customers. “We’ve become the number five credit card issuer and we’ve been issuing for the last few quarters something like 30% of new credit cards, so we’ve become the largest issuer of new credit cards in the world,” Lahrech, a Moroccan native who’s been working at Nubank for three years, said.
More recently, the digital bank launched its Cuenta Nu account, which reached 500,000 users in the space of a week.
Brazil’s central bank wants more superapps
Brazil’s central bank (BCB) envisages a financial ecosystem where there is a complete integration of the Pix instant payment platform, a central bank digital currency and open finance, and the country is already on its way there, according to Otávio Ribeiro Damaso, the BCB’s head of regulation.
These three pillars of the ecosystem form part of the bank’s innovation agenda and will be complementary in the near future, allowing the development of new, multipurpose products, Damaso said this week during a workshop on the tokenization of finances.
Pix is adding new functionalities, such as collections, Pix by ITP (payment transaction initiator) in open finance and buy now pay later. In open finance, meanwhile, there are 800 participating institutions, 31 million users have consented to their data being shared, and 13 APIs have been set up while a further 16 are under development. At the same time, progress is being made with the pilot of the bank’s digital real.
The BCB envisions the proliferation of superapps with multiple financial products and services: from traditional ones such as credit, payments and investments to new solutions, such as payment initialization and data aggregation. “Closing this movement, we believe in the monetization of data. Open finance is a part of that, and we’re building an ecosystem in which clients can use their information for their benefit,” added Damaso, who also said Brazil has more than 100 regulated credit fintechs.
In a demonstration of the power of regulation to make a difference in the financial system, the BCB also says it is advancing towards the complete digitalization of financial intermediation. This brings with it the challenge of increasing financial inclusion, reducing operating costs, expanding competition, having greater efficiency in risk control, promoting data monetization and, eventually, the complete tokenization of financial assets and contracts.
Live coverage from the Chile Fintech Forum
This week, we’re in Santiago visiting the Chile Fintech Forum, where we spoke to the Minister of Economy, Nicolás Grau, who announced plans to create a “fund of funds” to boost the country’s fintech ecosystem.
We also had an exclusive interview with the financial markets regulator, the CMF, which is evaluating regulations related to the Chile’s fintech law, including its handling of the crypto space; and we also spoke to the central bank, which is still weighing the pros and cons of a digital peso. You can catch up with all our live coverage here.
Uber obtains Mexican fintech license
Uber obtained authorization to operate as an IFPE in Mexico, which will allow it set up its digital wallet, UBR Pagos México. Uber began experimenting with credit more than a year ago, creating alternative risk profiles with data collected in its app.
Meanwhile, rival ride-hailing platform Didi is testing a credit card in Mexico. Since 2021, Didi says it has granted more than 5 million personal loans of up to MXN $30,000 (about US$1,700) through its app.
More than 1 million Didi Préstamos customers used the digital lending service for the first time, and more than 60% applied for more than one loan.
Ualá halts crypto operations due to new regulation in Argentina
Argentine fintech Ualá suspended crypto operations after the country’s central bank restricted wallet transactions involving virtual assets. Ualá customer are no longer able to purchase or hold bitcoin and ether on its platform, which will force some 300,000 users to sell their crypto assets.
- In Peru, credit marketplace Alprestamo made its local debut. The company already has operations in Argentina, Uruguay, Mexico and Colombia.
- In Brazil, blockchain-based financial solutions company Transfero introduced an app for individuals and companies that want to buy, sell and hold cryptocurrencies.
- In Bolivia, startup Presto teamed up with Visa and Banco Nacional de Bolivia to launch a card under the buy now, pay later model.
Nubank leaves losses behind
Nubank reported a net income of US$142 million in its first quarter earnings report, reverting a loss of US$45.1 million in the same period in 2022. David Vélez, the founder and CEO of Nubank, said the neobank almost doubled its revenue in the same period to a record US$1.6 billion. The neobank had a total 79.1 million customers in Brazil, Mexico and Colombia, a 33% increase from the same period last year.
Citi Colombia names its first woman CEO
Citi Colombia appointed Elizabeth Rey CEO, making her first woman to hold this position. Rey has more than 20 years experience in the industry, 14 of which were spent at the U.S.-owned bank.
The trend for retailers to expand into digital finance is growing. And it’s not just retailers that are getting in on the act, as iupana’s updated roll call demonstrates.
- A growing number of companies, from retailers to delivery platforms, are broadening their offering to include digital accounts in order to meet consumer demand.
- We’ve updated our list of non-financial companies in Latin America that now have fintech operations.
- Walmart, OXXO, Didi and Ripley are some of the companies looking to fintech to help grow their core business and develop synergies.
Find out more about the retailers and other businesses riding the fintech wave in our weekly report.