Fintech Acquisitions, B2B Strategy, Mexico’s Digital GrowthBy Emilio Aristegui | Thu, 09/02/2021 - 17:58
This week, Mexico unveiled the economic package for 2022, which highlights the current administration’s three main infrastructure projects. Meanwhile, imports recorded an important growth during July, fintech companies took a massive step to grow and the battle to develop new salary payment methods takes over.
In exciting news, Latin America is expected to take an important step forward in fintech thanks to its massive amount of talent, investors and entrepreneurs.
Ready? This is the week in finance!
Konfio, a fintech specialized in providing loans to small and medium-sized enterprises, completed the purchase of one of the most important players in mobile point sales (MPOS) and e-commerce in Mexico. Enrique Maru, Chief Revenue Officer at Sr Pago, believes this was an enormous step for the company and a great help for Mexican companies: “Now more than ever, we have learned that flexibility and adaptability are key to the survival of MSMEs in Mexico and the world.”
According to Mexico’s Fintech Radar, “the number of players in this space has grown at an average rate of 23 percent every year, with at least 441 active startups registered to date.” There has also been an important shift in the market as fintech companies begin to explore the possibility of solving businesses’ needs instead of focusing on clients. 2021 appears to bring a major opportunity for Latin America, according to Gerry Giacoman Colyer, CEO & Founder at Clara: “Latin America is experiencing a very exciting moment: for the first time, there’s a critical mass of talent, investors and entrepreneurs to build up massively impactful businesses faster than ever before.”
The economic package for 2022 will focus on stabilizing the Mexican debt, while allocating more funds for the three main projects of President Andrés Manuel López Obrador’s administration: Santa Lucia Airport, Dos Bocas Refinery and the Maya Train. The Head of SHCP, Rogelio Ramírez de la O, explained what can be expected of the package: “The fiscal package is designed to keep the public debt stabilized and to maintain fiscal prudence. On September 8, we will present a balanced economic package between income and expenditure, (which will be) responsible, realistic.” The tax strategy will remain the same, as focus will increase on targeting tax-evasion instead of increasing taxes.
A BBVA report highlights what’s to come for Mexico’s digital future. “The following years will be decisive in determining whether the country managed to digitally and financially include most of the population in Mexico, especially those outside of urban areas.” There is a strong interest in developing financial tools that allow the country to continue on its path toward digitalization. Juan Luis Bordes, General Manager of PayPal Mexico, told MBN that “In the last few months, people had no choice but to buy online.” The foundations of this market are already solid. However, industry leaders are targeting a much bigger growth.
Mexico increased its commercial deficit as imports exceeded exports dramatically in July. “Timely foreign trade information for July 2021 indicates a deficit trade of US$4.06 billion. This balance is compared with the surplus of US$762 million reported in June. The reduction in the trade balance between June and July originated from a decrease in the balance of non-petroleum products.” Oil trade took the spotlight during July, as oil exports grew 104 percent while oil imports grew by 119 percent.
Nima Pourshasb, CEO at Minu and startup contributor for MBN, indicates that, “The trend is now growing globally to offer payment of the salary already earned (pay on demand) without having to wait for the payroll date. The objective is clear: to empower employees to choose the best way and moment to receive their already earned income.” There is a fierce competition for this market as several firms battle to develop the most innovative and effective tool. Pourshasb also believes that in the next decade, “more than half of workers worldwide will receive their wages worked when they need it without having to wait for the payroll date.”