
Since its establishment in Brazil and its great success, Nubank, a pioneer in Latin America financial technology, has also brought this boom to Mexico. In May 2019, it announced its entry into the Mexican market through the establishment of a subsidiary named Nu. This is also the first time that Nubank provides financial technology services outside of Brazil.
Now this Nubank, which emerged as a challenger to the Brazilian financial system 7 years ago, has become a fintech player with a valuation approaching tens of billions of dollars and a strong influence in the region. In March this year, Nu Credit Card, which was launched in Mexico in cooperation with MasterCard, has reached 30,000 applicants in a short period of time. It is widely welcomed by young people. Just like Nubank’s work in Brazil in the past, its expansion in Mexico is also inevitable. It will bring new changes to its financial technology ecosystem.
Latin American financial technology, Mexico is full of potential
Life has not been easy for Mexico in recent years. Not only was bullied by a big blonde flicker from the north, and there is also a (leftist) populist president AMLO in this country. Not only is the epidemic almost out of control (comparable to the United States and right-wing populists on stage in Brazil), but the press conference at 7 o’clock every morning often has ridiculous New Deals or comments seriously expressed.

Behind politics, as the second-largest economy in Latin America and the largest Spanish-speaking country in the world, Mexico, with a population of 130 million, still has nearly 63% of adults unable to use financial services, and 90% of consumer transactions are still in cash. The dependence on cash transactions and poor financial services have created a phenomenon unique to Mexico: Quincenas(‘two weeks in English), that is in Mexico when the company pays its employees every two weeks-a large number of people line up in front of the ATM to withdraw money.

As a result, many expatriate forums in the United States have strategies on how to avoid La Quincena in Mexico. When a colleague of MomentumWorks attended a wedding in a small town in Mexico a few years ago, he bought something because the only ATM in the town broke down. The seller accompanied him to a nearby big city for an hour and a half. Of course, this story is not representative.
On the other hand, Mexico also has a large number of Internet users and considerable smartphone penetration. It is Uber’s third-largest market after the United States and Brazil, and its number of active Facebook users ranks fifth in the world. These have also laid the foundation for the development of financial technology. For more information about Mexico, you can also read Momentum’s earlier Latin American Unicorn series.
New Battlefield of Latin America’s financial technology
With the expansion of Nubank in Mexico, more and more fintech players have begun to emerge to target this piece of cake. As one of the many challenges, albo has recently raised another US$45 million in financing after raising US$26 million in December last year.

In Latin America, credit cards are actually a very good channel. Because compared to cash loans, credit cards that also borrow money look much more advanced. And Latin America itself has a relatively high acceptance of credit card culture-in this regard, Africa and South Africa are more similar. A friend of MomentumWorks who started a POS business in South Africa felt this very keenly (he later tried to develop in Nigeria, but fortunately he didn’t go all-in).
Different from other financial technology companies such as Nubank, the company has adopted the route of encircling cities in rural areas in recent years, targeting low- and middle-income groups. Even consumers with no credit history can enjoy the services provided by albo. albo and MasterCard have cooperated to launch a loan Credit card and personal financial management applications are claimed to allow customers to successfully open a bank within five minutes and enjoy the high-quality services brought by financial technology.
At the same time, albo has also established nearly 30,000 outlets in convenience stores and drug stores to provide consumers with services such as cash deposits and withdrawal. According to Apptopia data, the company has a 40% share in the Mexican digital banking market. Of course, Apptopia can only count downloads, monthly and daily activities.
In addition to albo, there are also Fondadora, which entered the field with a crowdfunding platform of 1.5 million US dollars, and Vexi, which has issued nearly 20,000 credit cards.
There are also entrepreneurs from China involved. Stori Card, located in Mexico, has received two rounds of financing from Source Code and Vision Capital. One of the founders with a Chinese background used to work at Capital One.

Of course, banks in the traditional financial industry are not idle. Bnext and Banco Sabadell from the Bank of Spain have entered Mexico and started cooperating with financial institutions. Banregio, a local bank in Mexico, also launched a new digital banking application Hey Banco.
Although the Mexican market is still in its early stages, as more financial technology products enter the market, a potentially expensive competition for users is about to start in Mexico.
This is bound to change the face of Mexico’s consumer finance industry, just as Brazil’s financial industry has experienced in the past few years, and who is leading the wave of financial technology this time is a matter of time.

One thing is certain, compared with the Brazilian Central Bank that killed Whatsapp payments before, the style of the Mexican Central Bank is still very different.