5G Technology, Digital Payments Gather MomentumBy Emilio Aristegui | Thu, 10/28/2021 - 16:01
Mexico’s dependance on cash payments has represented a major struggle for fintech newcomers in the country. However, the digitalization of data has opened major opportunities for financial companies seeking to create digital solutions in the country. The creation of 4.2 million YTY jobs in September 2021 represents major strides in Mexico’s recovery.
In other news, 5G technology is just a matter of time.
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Mexico and Latin America continue to depend heavily on cash money as the rest of the world moves quickly towards digital transactions, Vicente Aguirre, Business Development Head, Arcus Financial Intelligence, told MBN. Aguirre believes that the solution for the financial industry in Mexico must merge both worlds: “The solution is to have highly efficient hybrid models in which the two universes (physical and digital) can coexist. Efficiency, cost-efficiency and payment traceability are all key factors that need to be a priority.”
After a year-long delay America Movil announced that the company is ready to bring 5G technology to Mexico. However, the date for the official arrival remains unclear. Daniel Hajj, CEO of the company, told investors that America Movil is ready to launch 5G but is suffering from a lack of handsets. Hajj’s latest announcement regarding the technology was hopeful but unclear: “We’re doing everything to be ready for 5G. We still do not know exactly when we are going to launch 5G, but we’re ready to launch it.”
Aitor Chinchetru, Co-Founder and CEO, Fintonic, told MBN that open banking “will allow the democratization of ﬁnancial products and services, reaching more people.” Chinchetru stated that the purpose of fintechs is to provide users better services that respond to their needs, while also highlighting that Mexico is a worldwide reference for open banking considering that the country has the potential to generate information exchange between around 2,200 entities.
After the catastrophic unemployment rates Mexico suffered in 2020, the country has taken major steps in the recovery process. The creation of 4.2 million jobs from September 2020 to September 2021 has given the Mexican economy oxygen to fight through the economic effects of the pandemic. INEGI’s September 2021 survey indicated that 57.5 million people above the age of 15 are employed in Mexico, as 25 out of 32 states improved their employability rate in the same month, in comparison to 2020.
As the vaccination campaign continues throughout the country, Mexico is set to face the new challenges that the post-pandemic world will bring. Supply-chain disruptions and increasing input costs continue to hit the economy severely. The automotive industry, which represented 20 percent of Mexico’s GDP has been affected by chip shortages. Rodolfo Navarrete, Investment Analyst at Vector Casa de Bolsa, said that a company’s economic performance to date will guide its financial solutions in the short-term as debt refinancing gains popularity.
Heye Guo, OPLAY CEO & Co-founder, Nanopay, said that Nanopay decided to invest in Mexico because of three major factors: “political stability, a population threshold of 100 million and an expansive telecommunications infrastructure with accessibility between 60-70 percent.” The spending habits of the Mexican population were attractive for the company as well, as Guo believes that the population is willing to periodically indulge. The rapid adoption of digital tools in the country also allowed Nanopay to fully enter the Mexican market.
Pablo Viguera, CEO & Co-Founder, Belvo, believes that Latin America is set to grow significantly in the fintech sector. “Latin America has undoubtedly become fertile ground for the entire fintech sector, attracting a historic investment of more than $8 billion in 2020 alone.” The digitalization of financial services, the openness of consumers to non-traditional financial providers and the willingness to share personal data have paved the way for Latin America to create a powerful financial infrastructure.