The horizon of Fintech in Mexico

A study conducted by Santander Mexico, the Embassy of the United Kingdom in Mexico, Finnovista and Google, explains the situation of financial technology companies and the challenges they face with regulations in Mexico and abroad.

This first-ever study of this magnitude on the Fintech ecosystem in Mexico has concluded that the sector is in a clear stage of growth, with opportunities but also major challenges ahead, especially in regulatory matters. Its main findings are:

• Mexico’s Fintech ecosystem, consisting of more than 515 active companies, is the most dynamic in Latin America and clearly growing. Since 2015, more than 266 new companies have been created and upwards of 270 startups have received 629 million dollars in equity and financing. Last year alone, more than 300 million dollars were mobilised.
• This ecosystem directly accounts for 3,600 jobs, and benefits more than 4.5 million service users. Most companies (56%) have between 1 and 10 employees, while 22% have between 11 and 25.
• Fintech generates 68.409 billion pesos in annual revenues, according to a sample of 148 firms.
• Mexico’s Fintech Ecosystem Maturation Index (INFIN) stands at 48%; the sector is still in the early stages of development. This assessment of the sector considered such variables as sales, jobs, investment, revenues, active users, market and technology. 
• The average Fintech has been active for three years, with 105,000 dollars in annual income, 9 employees and 230,000 dollars in equity. This shows that the Fintech sector in Mexico is made up mostly of entrepreneurs in an early stage of growth.
• It is estimated that around 200 of the 515 Mexican Fintechs mapped out by the National Banking and Securities Commission (CNBV) are categorised as electronic payment funds (wallets), virtual assets (cryptocurrencies) and collective financing (crowdfunding) and, thus, are subject to the new ‘Fintech Law’.
• 57% of surveyed Fintechs stated they are subject to new provisions and expect to incur costs of 35,000 dollars per year (including fees for legal and consulting services for mandatory regulations).