This month, remittances major Western Union acquired Brazilian e-wallet Te Enviei, a move that will enable it to launch new products in Latin America in the first half of 2023. The deal comes amidst a flurry of payments activity in LatAm as players in key markets expand outwards, while other cross-border players expand their reach into the region.
Fintechs focus on Latin America
Latin America has been a burgeoning zone for fintechs due to its high unbanked population, increasing digitalisation and growing adoption of mobile banking. In 2021, the World Bank reported that almost half of the Latin American and Caribbean population are unbanked, with many using their mobile phones to make payments.
Crypto continues to see high adoption in the region – El Salvador recently adopted bitcoin as its national currency, while Argentina has seen an increase in the number of companies paying employees in cryptocurrencies due to their relative stability against the volatile Argentinian Peso.
This affinity for crypto is reflected in many key partnerships recently. For example, Bitso, a crypto exchange that became LatAm’s first Unicorn last year, has signed a deal with money transfer player Africhange to enable crypto remittances between Canada and Mexico. Meanwhile, Visa is working with a number of countries, and partnering with leading crypto exchange crypto.com, to launch a series of new cards that will give users cashback in bitcoin for every purchase made (for more info on players in the crypto card space, read this report).
Latin America and the Caribbean saw a surge in remittance flows in the region as the job market has recovered for immigrants in the US. Its acquisition of Te Enviei is just one part of Western Union taking hold of this opportunity; the company has also enabled digital and physical money transfers from Chile to more than 200 countries and territories, as well as adding 9,800 new send locations in Colombia earlier in 2022.
As the largest economy and fintech haven for LatAm, Brazil has been a key market focus for partnerships recently. Ripple has partnered with Travelex to bring its on-demand liquidity offering to LatAm in a bid to boost cross-border payments in Brazil and Mexico. Brazilian fintech Ebanx has made major moves this year, launching its mobile money services in Africa and working with global investment bank Citi to allow its ecommerce clients in 11 LatAm countries to accept 100 payment methods online.
We’re always tracking the payments industry in LatAm and other regions worldwide, so stay tuned for the latest developments.
How is the market growing for cross-border payments in Latin America?