Fernando Gutiérrez
View from the Top

Connecting Clients to Banks in Real Time

Wed, 02/21/2018 - 11:04

Q: What is the extent of STP’s financial and technological offering?

A: STP is a fintech company related to electronic payments. The company was founded in 2008 and is connected to Banxico’s System of Interbank Electronic Payments (SPEI). This means that our software connects our clients in real time with all banks. We link the bank system with our software so we can update accounts payable or receivable without human intervention. The proposal is advantageous because it eliminates manual processes and the accompanying risks. It also saves time and labor, which translates to efficiency. The objective is to eliminate banks as payment intermediaries. If customers want to make a payment, they only need to send the instructions to STP and, always in real time, they will know if the payment was processed or not.

Q: Mexico has among the highest smartphone rates in Latin America but internet penetration is low. What is STP’s position in this environment?

A: Startups and apps are an important part of our client portfolio. After developing a business idea, they are faced with the dilemma of how to charge and transfer funds between their clients and end users. We are not a final product. We are a commodity for Mexican fintech companies because we solve interbank transfers 24/7. In our portfolio, we have fintech companies, card issuers and online credit companies, crowdfunding, P2P lending and traditional companies.

Q: What is the relationship between traditional banking and a fintech company such as STP?

A: STP offers solutions to different problems from those of traditional banking. The business of a bank is to raise and lend capital, while ours is automation of payments and collection. However, some banks do not care about transactions because the money always ends up reaching their accounts. This is why our growth potential is huge. It is true that we compete with banks but we offer personalized services for each of our clients’ needs. STP is the only company that offers this service in Mexico.

It is not in our plans to become a manager of a big bank’s transfers. Banks are so large and complex that moving a single piece of their SPEI, which is the heart of the bank, is complicated. However, they have reached out to us because they need our speed and technology. 

Q: Which governmental agency oversees companies such as STP?

A: There is a regulation issued by Banxico that covers all SPEI participants. This was initially only for banks, although later it was expanded to include other authorized entities. What Banxico wants is to end cash operations. That is why Banxico sees us with good eyes because we contribute to strengthening the country’s banking system. This also means that we need to follow Banxico’s security protocol.

To prevent network failures, we have placed two servers in the US. A bank can go without transactions for a couple of hours but if STP goes two hours without SPEI, the business ends for us. That is why we want more security. As for customer privacy, this involves internal policies that do not include Banxico. CNBV regulates everything related to money laundering and STP is obliged to maintain control of all transfers as well as to review all our customers’ data. We comply with the Know Your Customer (KYC) practice.

Q: In 2016, Mexico received over US$26 billion in remittances from the US. What is STP’s role in that scenario?

A: We have a very interesting challenge ahead, since according to our data 95 percent of remittances are made cash-tocash. Our business is based on the cash-to-account model: we deliver the remittances to a bank account, debit card or cell account. The cost of sending money remittances from the US to Mexico is around US$4, while we charge US$0.25 cents and we are open seven days a week, 24 hours a day. What happens in this type of industry is that we push people to open bank accounts, thereby contributing to the country’s banking system.