By Jorge Salum, Senior Director, Business Development for Visa Latin America and the Caribbean
The last decade has been marked by a rapid shift towards digital. Fintech have played an important role in propelling the payments and money movement industry to reach more people and businesses, tackle once “unsolvable” challenges, and accelerate the adoption of emerging technologies.
In Latin America and the Caribbean, fintech investment and growth continue to be a source of positive news. According to a recent CB Insights report, last year represented the second largest investment year on record (despite the marked drop in funding) with the emergence of seven new unicorns across insurance, payments, and banking segments, and an increased offering to SME. And while Mexico and Brazil continue to be the largest markets for the fintech sector, the Caribbean has shown incredible momentum. Markets like Puerto Rico, Dominican Republic, Trinidad & Tobago, and Jamaica are emerging as prospective fintech hubs, because in addition to breathtaking sceneries and friendly locals, they boast fertile grounds for innovation.
Caribbean markets, although relatively small in size, have the potential to serve as innovation incubators for small and large fintechs alike. The region provides a mix of markets with favorable regulatory and tax conditions paired with broad diversity in population size, economic mix, banking and infrastructure penetration, and financial and digital literacy. This provides ample opportunities for fintechs and other innovative players to introduce a large range of solutions that can quickly have a measureable impact on the local market, and utilize these learnings to scale to other markets.
In addition, there are significant untapped opportunities, where the existing payments infrastructure provide fintech with the foundation to develop impactful, scalable solutions. One is remittances, which are not only a lifeline for individuals, but are also vitally important for the prosperity of many developing economies. Based on the World Bank Remittances Prices Worldwide Database, as global remittance inflows continue to reach new highs and consumers turn to digital apps to send and receive funds around the world, opportunities for fintechs in regions like the Caribbean are ample. Notably, solutions such as Visa Direct, widely present in the Caribbean, enable the sending and receiving of remittances in near real time from many of the leading global remittance companies and can be foundational for fintech developing remittance-focused solutions.
Another important business opportunity is centered around the development and inclusion of Micro, Small and Medium Enterprises (MSMEs). Fintech with turnkey digital or acceptance solutions and efficient delivery channels have an opportunity to make an impact in the market. Visa owns and partners with multiple gateway providers that provide fintech with one integration point to reach most markets in the region. These gateways also provide fintech an efficient source of innovation that enable new use cases and functionalities.
One market that has seen recent fintech momentum is Trinidad & Tobago, where regulatory changes, infrastructure development and strong market coordination have created a more inviting environment for innovative companies to make an impact. This has led to an influx of local companies applying for Electronic Money Issuer Licenses, which would allow them to issue payment credentials, and an acceleration in the number of SMEs that are interested in accepting electronic payments. In addition, the TTIFC, with the support of the Ministry of Finance and sponsors like Visa, recently inaugurated One Fintech Hub, a collaboration space focused on connecting electronic payments stakeholders and enabling local and regional fintechs to grow their businesses.
Redefining the future of payments requires a collective effort, which is why we value and foster collaboration. We support fintech partners of all shapes and sizes, through programs like the Fintech Fast Track (designed to help launch financial features quickly) and the Visa Everywhere Initiative (designed to help startups in more than 100 countries collectively raise more than $16 billion in funding since its inception). We know that the next big thing in payments can come from anyone, anywhere. For that, we feel energized and remain committed to continue exploring and developing solutions alongside fintechs, enablers, and other payment partners in the Caribbean and beyond to uplift more individuals, communities, and businesses everywhere.
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