Is Latin America at the forefront of financial innovation?

The state of innovation in Latin America” is the name of the recent study published by the Visa Innovation Center, which focuses on determining the ways and trends in which companies in the region make their payments and the variety of their services financial

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Leer en español: ¿Va América Latina a la vanguardia de la innovación financiera?

This report presented results of the main economic powers of the region, including Argentina, Brazil, Mexico, Chile, Colombia, and Peru.

What did the study consist of?

The companies that were the object of the study are especially financial and commercial institutions that offer services such as payments and transactions, personal finance management and consulting and marketing platforms for investments.

To reach the results, Americas Market Intelligence (AMI), consultants who worked aside with Visa, evaluated different aspects of innovation. Among them, the internal support to the innovation, the capacity of execution, the use of new technologies and the capacity to promote solutions and to provide them.

Leading banks and native companies rank as the best, as well as traditional companies that begin to advance in the digitalization of their commercial activities.

Vanessa Meyer, Vice President of Innovation and Design of Visa for Latin America and the Caribbean, expresses to the specialized site, América Economía, the surprise that is to find innovation in retail stores, which little by little are becoming financial providers.

In addition, Meyer explains the need for innovation in terms of keeping consumers satisfied: “Online markets are providing banking services; and banks are using more open platforms to facilitate payments, all in an effort to retain the most loyal customers”.

One of the main purposes of this study is to determine a solid panorama to be able to recognize advantages and shortcomings and in this way accelerate innovation in payments.

The results

Brazil and Mexico are at the forefront of technological innovation, which has made them today pioneers in the interoperability of national and international cards. Besides, for its part, Brazil presents a solid local financial ecosystem to make payments, supported by world-class trade groups.

As for Mexico, it is to be emphasized that its leadership lies in the opening and extension of banking, which allows greater access for clients to use the different forms of payment. In turn, and paradoxically, what positions them, is the ingenuity to opt for alternative forms of payment for those who have not subscribed to the financial system.

The outlook for Mexico is encouraging, as economic laws are helping to strengthen the Fintech environment and, in itself, omnichannel solutions for banking access, which promises to be a boost for the country’s digital economy and inclusion in the country’s Bank System.

The perspective of Colombia is not far from the financial reality presented by Brazil and Mexico. However, its greatest achievement is the success of the most valued Latin American unicorns in the region; among them, the case of Rappi, which according to TechCrunch, is valued at one billion dollars. This platform of online delivery services, and the policies that help promote access to banking, push Colombia into such innovation.

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In the same way, MercadoLibre of Argentina places the country in an innovation horizon. What this country has also achieved is the promulgation of policies that regulate payments in real time and changes in the private sector towards its digitalization.

As for Chile, the rising of new companies and electronic commerce is outstanding, in addition to the fact that contactless payment is a phenomenon that spreads throughout that country. Chile, like Mexico and Argentina, has several laws that offer better dynamism for users to access the purchase of prepaid electronic cards and payments.

Unlike previous countries, Peru still manages its rapid economic growth with cash, so that new technologies for payment are smaller compared to other countries. However, digitization is expected to accelerate.

In general, the results showed that innovation in financial services is already evolving throughout Latin America and the Caribbean.

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