The fintech payments and remittance industry in Mexico is a rapidly emerging market with significant potential. Here are some key insights and data that can help guide your strategy.
Market Overview:
1. Mexico is the largest remittance recipient in Latin America, primarily due to migrants living in the US, and it has a flourishing fintech industry with over 400 fintech companies operating in the country.
2. As of 2022, remittances to Mexico hit a record, showing an increase by almost 13% compared to the previous year, reaching over $51 billion. This indicates a robust market for remittance services.
3. Cash is still prevalent, but the digital payments sector is growing. Approximately 63% of adult Mexicans didn’t have a bank account in 2021, prompting an increased focus on financial inclusion.
4. In terms of regulation, Mexico is ahead of its Latin American peers with its ‘Fintech Law’ coming in 2018, one of the first comprehensive fintech regulations in Latin America, which provides legal recognition and regulatory guidelines for crowdfunding, e-money, virtual assets, and sandboxes.
Industry Trends:
1. Mobile money and digital wallets: There’s a rapid adoption of mobile payments and digital wallets with increasing smartphone penetration and internet access.
2. Blockchain and Cryptocurrency: Given the rise of remittances, blockchain and crypto-based remittance solutions to enable low-cost, high-speed money transfers are being actively explored.
3. Partnerships and collaborations: Banks, fintechs, and Big Techs are collaborating to gain market share and reach unbanked and underbanked segments.
4. Neobanks: Digital-only banks, or neobanks, are on the rise, offering user-friendly and fee-free services to attract millennials and digitally savvy customers.
Strategy:
1. Tailor your services to mobile users as smartphone penetration continues to increase. Enhance user experience, and consider regional preferences and habits.
2. Collaborate with traditional banks or other fintechs to expand your reach and leverage existing infrastructures.
3. With a high unbanked population and significant remittances, consider affordable and easily accessible products/services to encourage financial inclusion.
4. For remittance services, ensure security and speed, and show value comparison to traditional remittance methods.
5. Stay updated and compliant with the Fintech Law to avoid regulatory obstacles.
6. Consider local language support and culturally aware customer service, considering regional diversity.
7. Investment in blockchain technology for remittance can lead to long-term benefits with faster, cheaper international money transfers.
Remember, this is a dynamic industry, staying agile and open to innovative partnerships and technological advancements will be key to success.
Pedro Gloria
Partner
