The financial technology revolution has begun in Mexico, creating room for Irish fintech firms to gain new opportunities in the global market.
Mexico is on the rise to be the leading market for fintech in Latin America. There are currently 384 fintech startups in Mexico today. Many of these startups are operating in lending and payments, while there are companies also operating in blockchain, cryptocurrencies, digital banking, crowdfunding, identity and fraud, scoring, and personal and enterprise financial management.
While this revolution is occurring in many parts of Mexico, it is hard for some areas to take part in the financial technology revolution due to a lack of internet access and poor mobile services, a majority being rural areas. With the best internet connectivity, and therefore access to mobile banking, fintech companies are drawn to urban areas. Over half of the startups are located in the capital, Mexico City.
Driven by the Covid-19 pandemic and its increased need for contactless payments, the use of cash has declined in the last few years. Between 2018 and 2020, mobile banking in Mexico went up 113%. Fintech Mexico is an association for firms in the fintech industry. Research completed through them shows that digital wallet and neo bank account openings are up by 30% and transactions have skyrocketed up to 80%.
With the pandemic forcing limited cash transactions, the government continues to refuse the translation to fintech. The country continues to send out a majority of its emergency fund and loans in the form of cash. Many people in the fintech industry believe that as fintech continues to expand, especially beyond the urban hubs they are currently in, that the government will transition away from cash.
Over the last couple of years, multiple Irish fintech companies have taken a leap of faith to expand into Mexico. Workhuman, AdaptiveMobile, and Daon are all examples of companies that have great success stories. With the help of many other Irish fintech companies, Irish exports to Mexico were up 36% from the previous year, totaling €83 million. Companies that are considering doing the same should look into these companies for inspiration, as well as reach out to them to help expand their connections in Mexico.
Fintech in Mexico is increasing more and more every day. On June 15, 2021, Credijusto became the first fintech in Mexico to acquire a bank — this is only the beginning. The level of potential that Mexico has in the world of fintech is endless, especially with the help of Irish fintech firms.
Hill, Sara. “Fintech Firms See Exponential Growth South of the Border, down Mexico Way.” Independent, Independent.ie, 14 June 2021, www.independent.ie/business/small-business/advice-centre/fintech-firms-see-exponential-growth-south-of-the-border-down-mexico-way-40535538.html.