We have a meaty pair of interviews for you today with the founders of Ualá and Klar who are both talking up their growth expectations in Mexico. Plus…Cencosud is planning its own wallet in Chile and Google launches GPay in Argentina.
This and more in your Friday Briefing .
#TopStory
“Personally, I don’t agree,” says Ualá CEO on Argentina’s crypto shutdown
Pierpaolo Barbieri, Ualá’s CEO and founder, lamented a decision by the Argentine regulator to restrict cryptocurrency operations for some fintechs, adding that he sees great potential in crypto finance for digital lenders.
The unicorn suspended its bitcoin and ether exchange operations last month in the wake of a move by the Central Bank of the Republic of Argentina (BCRA). “In Argentina, the central bank changed the regulation. Personally, I don’t agree,” Barbieri told journalists on Wednesday in Mexico City.
“But we comply with the regulation always, and that’s why we did what the regulator asks,” he added, in response to a question from iupana. “We are not one of those who operate offshore and violate local laws. Because if that were the case, we would not be able to have the trust of the regulators that one needs to create products with confidence and with licenses.”
The fintech plans to accelerate the launch of new financial products, especially in Mexico, where a new banking license gives it the opportunity to expand its ecosystem. In this sense, Ualá announced a savings account with an annual fixed rate of 9% for their Mexican customers, as well as an investment in the business of US$ 150 million for the next 12 to 18 months.
The fintech also expanded its remittance service, with an alliance with Western Union, and relaunched their Ualá+ loyalty program, which offers points for purchases. Barbieri added that he does not rule out introducing insurance, crypto services and even payroll services for the Mexican market. The license also allows Ualá to be an acquiring bank, a vertical where it already has a presence with Ualá Bis, its merchant payments division.
With these tools, the company is betting that in the next three years the number of users in Mexico will exceed the 4 million customers they currently have in Argentina, and where after six years of operation they are close to achieving profitability, said the CEO.
The license will also boost its lending business, said the executive, through the expansion of in-app micro loans and credit card issuance, something it had already started through a co-brand agreement with ABC Capital bank, whose acquisition concluded two weeks ago after an 18-month process.
Klar wants to accelerate lending, as competition grows in Mexico
Meanwhile, Mexican fintech Klar wants to accelerate its pace of customer acquisition after reaching the goal of 2 million users, at a time when digital lenders in its market are multiplying.
The company closed the purchase of a local Sofipo financial institution in April, an acquisition which allows it to expand its offering. Klar uses information from credit bureaus combined with alternative sources and proprietary data to evaluate credit card applicants, a formula that is allowing them to give approvals without hurting delinquency rates.
“The competition is against cash. It’s against traditional institutions,” Stefan Moller, CEO and co-founder of Klar, told iupana. “We have to create confidence for the consumer and the user that there are alternatives in the market.”
Other fintechs such as Mercado Pago, Stori and Ualá, along with non-financial players such as Didi, also say they want to increase digital lending. According to official figures, only 27% of Mexicans have access to formal credit products such as bank cards, which is encouraging startups to address this space.
“We complement our risk models with traditional data sources, less traditional data sources and this allows us to say yes more often. Also by having a broader range of products, by offering accounts, we have access to proprietary information,” Moller said.
According to the CEO, more than half of Klar’s 2 million users have applied for credit cards and the default rate has remained in single digits despite the macroeconomic ups and downs, which are putting credit fintechs to the test.
#Strategic Plays
Retailer Cencosud preps digital wallet
Chilean retailer Cencosud is developing a digital wallet Cencopay, to enter the digital payments segment in competition with Falabella’s Fpay and Ripley’s Chek. The launch is expected to take place in the markets where the retailer operates: Chile, Argentina, Brazil, Peru, Colombia and the US.
Santander acquires digital broker in Brazil
Santander Brazil completed its acquisition of Toro Investimentos, a digital fixed-income investment broker. Santander had bought 62.5% of the company in 2022. With the acquisition, the bank expects to expand the platform’s services. The transaction is subject to regulatory approval.
Google Wallet lands in Argentina
Google launched its digital wallet in Argentina, adding to the 70 countries where it has a presence. We recently spoke to GPay, who told us that its strategy is based on improving the user experience of its search engine and wallet.
Despegar’s Koin introduces product for SMEs in Brazil
Despegar.com launched an integrated payment platform for small and medium-sized companies in Brazil through its fintech division, Koin. The fintech seeks to position KoinPay as a global payment manager. Despegar is known as Decolar in Brazil.
Also…
- In Colombia a new fintech, AAvance, launched its digital wallet, aimed mainly at Venezuelan migrants. Users will be able to hold small deposits at Banco Cooperativo Coopcentral, and request a Visa debit card. Want to know more about financial services for migrants? iupana did a deep-dive on this subject in this week’s iupanaExclusive.
#Investments
Habi closes US$ 50m financing
Colombian proptech Habi closed a US$ 50 million credit line from IDB Invest. The startup will use the funds to originate and accumulate assets to support its expansion plans in Mexico, to strengthen its home buying and selling operations in the country.
#People
Habi appoints CTO
Habi hired Adrian Mastronardi as the new Chief Technology Officer. Mastronardi has more than 15 years of experience in the technology industry, in companies such as Rappi, OLX, Globant and Delivery Hero.
#iupanaExclusive
This week we analyze the challenge of serving the migrant population with financial products, especially the more than 6 million Venezuelans dispersed in LatAm countries, who are emerging as potential users of banks and fintechs.
- The International Finance Corporation (IFC) says it has financing available for projects aimed at this segment.
- Cultural biases, trust and access to financial information are the challenges to overcome.
- Galgo has incorporated a digital onboarding system that includes identity documents of foreigners to deliver loans for productive capital, such as motorcycles or cars.
Get the full picture on the challenge of tapping into the unmet demand of migrants. Read the details in our iupanaExclusive.