Our Vice President for Latin America Mar Fernández came back from #Money2020USA on a high note: “Five years ago at fintech conferences around the US, no one was talking about Latin American fintech. Today however, including at Money2020, we’re seeing remarkable interest in the region.”
Mar attributes this heightened attention to several factors. First, Latin America is experiencing a significant boom in the digital economy: “From software developers to digital marketers, from content creators to financial advisors, these home-grown entrepreneurs are increasingly serving global markets. Latin America has great talent, and global companies are sourcing these high-quality services at competitive prices from the region.”
That also means more opportunity for fintechs to serve these small and medium-sized businesses. The sector is booming across Latin America. As the InterAmerican Development Bank has reported, the number of fintech platforms grew 112 percent from 2018 to 2021, and today nearly a quarter of fintech platforms globally are from Latin America and the Caribbean. Fintech investment is showing a similar pattern, even in these times, with 43% of private capital flowing into the sector, reaching $1.2 billion in the first quarter of 2022 alone. “Fintechs have been able to succeed in two main areas: meet the needs of people who have been totally or partially excluded by the traditional financial sector, and addressing demand for digital financial services,” according to Mar.
“The startups are there, but the market has some serious mature players as well,” she adds. “Mercado Pago, Nubank, Uala, Rappi Pay, and more specialized fintech like Konfio, Bitso and Clip have proven that offering a relevant product centered on customer needs and experience leads to acquiring customers at a much greater pace compared to the growth we saw in the past in the traditional banking sector. Together, they acquired almost 100M customers in less than 10 years. So, the opportunity is there. The key is to correctly interpret the consumer’s need and then develop the right offer, which these home-grown fintechs are doing.”
In Payoneer we still see a great opportunity to better serve SMBs that want to expand their business to the world, and we’re actively offering solutions that help them connect with this opportunity to generate incomes that will positively impact our economies in the region. We’re helping our customers and countries to sustainable grow.
“And all of this momentum is reflected at Payoneer,” concludes Mar, “We just announced that our Latin American business grew more than 50% when we compare our results at the end of Q3 2022 to where we stood at the same time last year, and we’re looking forward to growing together with the amazing entrepreneurs we serve across the region.”