Viewpoint: Why Mexico’s Fintech Sector Will Be One to Watch in 2020
By Craig Dempsey
In 2018, regulators in Mexico began addressing financial inclusion more aggressively with the introduction of new legislation for the financial technology space. The ‘fintech law’ offered a framework for regulating digital financial products, such as crowdfunding and electronic payment software, as well as a formal process for registering and operating a fintech firm. The goal of the fintech law was to help bring more people into the formal economy. Additionally, it would help to reduce the amount of cash in circulation, which would cut down on money laundering and corruption as well.
The economy in Mexico remains largely informal and cash dependent. An estimated 44% of the adult population in Mexico owns no financial products. This largely unbanked population, coupled with the new fintech legislation, has created immense opportunities for Mexico’s fintech sector to grow. In fact, roughly 100 new Mexican fintechs were established in 2018 alone, representing 52% growth for the industry. Mexico has become a regional leader with more than 273 fintech ventures operating in the country. When combined with Brazil’s 380 fintech ventures, the two countries make up 56% of the region’s total fintech activity.
Photo courtesy of Juanedc.