New Alliance Between Itaú and Rappi will Bring Greater Financial Inclusion to Chile

Top stories include: Argentina Advances Bill Exempting 1.3 Million From Income Tax; Argentina’s Digital House Raises over $50M to Help Solve LatAm’s Tech Talent Shortage; Is Cash Still King in LATAM? New Data from Visa Offers Alternate Perspective; and Dapi (YC W20) Launches Payment API in Mexico, First in Region to Offer Free Financial Data.

New Alliance Between Itaú and Rappi will Bring Greater Financial Inclusion to Chile

On Monday (March 29), Itaú announced a new alliance with Rappi that will bring greater financial inclusion to Chile. This initiative, backed-up on the experience and support of both Itaú and Rappi, aims to revolutionize the local financial market with simple, innovative and unique digital products, allowing an increasing number of individuals to access new financial solutions in an agile and digital way.

Global Newswire reports that Itaú and Rappi seek to democratize financial services, promote greater inclusion; while simplifying and accelerating digitization that brings broad benefits to users.

“At Itaú, we want to be where our clients need us, and we are thrilled to offer them new, simple, useful and reachable platforms, making their day-to-day easier and walking them through their financial needs. Both Itaú and Rappi are recognized digital players, and this alliance will allow us to reach an increasing number of individuals,” said Gabriel Moura, Itaú Corpbanca CEO.

According to Itaú and Rappi, they expect the new offer of digital financial products and services to be available during the third quarter of this year, through this new business model resulting from this alliance.

"This alliance is a great step towards a transformation of the local financial system, through collaborative work between two companies that are experts in what they do and that have a focus on the digitization of processes and services. Innovation is part of our entrepreneurial DNA, and together with Itaú, we will now also offer financial solutions," said Isaac Cañas, CEO of Rappi Chile.

Argentina Advances Bill Exempting 1.3 Million From Income Tax

Argentina’s lawmakers have taken a significant step in exempting about 1.3 million citizens from paying income taxes.

After a marathon debate, Argentina’s lower house of Congress passed a bill on Sunday to double the minimum taxable income to 150,000 pesos a month ($1,633) from the current level of about 75,000 pesos for a single person.

Bloomberg reports that the reform- pushed by the chamber’s leader Sergio Massa ahead of mid-term elections in October- passed unopposed after a rare Saturday legislative session. The measure now goes to the Senate.

Massa and other Peronist leaders have sold the bill to boost the country’s economic recovery from the pandemic. They argue it’ll incentivize consumer spending, which will translate into more revenue from sales taxes.

To help plug the gap of lost income tax revenue, Argentina is targeting rich citizens. The nation’s wealthy have until April 16 to pay a one-time “extraordinary contribution” derided by business chambers as anti-competitive. A judge recently ruled in favor of one citizen seeking to avoid the tax.

Argentina’s government set a primary fiscal deficit target of 4.5% of gross domestic product this year. It expects to finance most of the spending gap by printing money.

Argentina’s Digital House Raises over $50M to Help Solve LatAm’s Tech Talent Shortage

Buenos Aires-based edtech Digital House announced it has raised more than $50 million in new funding. Notably, two of the main investors are two large tech companies: Latin American e-commerce giant Mercado Libre and San Francisco-based software developer Globant. Riverwood Capital, a Menlo Park-based private equity firm and existing backer early-stage Latin American venture firm Kaszek also participated in the financing.

The raise brings Digital House’s total funding raised to more than $80 million since its 2016 inception. The Rise Fund led a $20 million Series B for Digital House in December 2017, marking the San Francisco-based firm’s investment in Latin America.

Nelson Duboscq, CEO and co-founder of Digital House, said that accelerating demand for tech talent in Latin America has fueled demand for the startup’s online courses. Since it first launched its classes in March 2016, the company has seen a 118% CAGR in revenues and a 145% CAGR in students. The 350-person company expects “and is on track” to be profitable this year, according to Duboscq.

Tech Crunch reports that in 2020, 28,000 students across Latin America used its platform. The company projects that more than 43,000 will take courses via its platform in 2021. Fifty percent of its business comes out of Brazil, 30% from Argentina, and the remaining 20% from the rest of Latin America.

The platform, focused on developing tech talent through immersive remote classes, includes courses aimed at teaching “the most in-demand digital skills” to people who either want to work in the digital industry or for companies that need to train their employees on digital skills. Emphasizing practice, Digital House offers courses — that range from six months to two years — teaching skills such as web and mobile development, data analytics, user experience design, digital marketing and product development.

Is Cash Still King in LATAM? New Data from Visa Offers Alternate Perspective

If the COVID-19 pandemic has driven 52 million Latin American consumers to buy online for the first time, digital payments, either, have not been far behind. This is what the third round of the Visa COVID-19 Consumer Sentiment, a study on consumer preferences during the pandemic in Latin America and the Caribbean, points out. The qualitative study was carried out with 400 participants in Argentina, Brazil, Chile, Colombia, Mexico, Peru and the Dominican Republic in November 2020.

“Everyone found themselves in a digital environment, so this also led to digital payments. In Latin America, where people always used more cash, the first peak of the trend, which we identified in March, was confirmed until the end of the year: the search for digital payments,” says Roberta Isfer, Visa’s Director of Innovation for Latin America and Caribbean, in an interview with LABS.

According to Isfer, in December of 2020 alone, 37 million transactions were carried out with contactless payments in Brazil. Over the past year, the exec says that the jump in this type of payment across Latin America was quite significant.

“In the last round [of the survey], 48% of respondents said they used contactless payments in physical stores, in at least one of their last ten purchases. In the first survey, in March, this percentage was 23%,” Ifser added.

According to the survey, consumption also followed this growth: 66% of consumers said they had spent the same or more in the last three months. In July 2020, this percentage was 49%. In addition to increased spending, Latin Americans have fancied cards instead of cash: 74% of consumers said they use a debit card, while 53% use cash. “In physical store payments, cash is already in third place in Latin America. Credit and debit are ahead,” she points out.

Dapi (YC W20) Launches Payment API in Mexico, First in Region to Offer Free Financial Data

Dapi (YC W20), the San Francisco and Abu Dhabi-based global payment infrastructure provider, has announced the launch of permission-based bank payment initiation and account data aggregation services in Mexico.

Business Wire reports that Dapi is one of the first companies to offer integrated bank transfer payments to Mexico’s fintech community, enabling companies to accept money directly from customer bank accounts from within their applications or websites.

Commenting on the launch, the company’s co-founder and Chief Executive Officer, Ahmed Agour, noted: “Over the last six months, Dapi has focused on making our payment infrastructure available to fintech and enterprises globally with our expansion in the United States and now Mexico.

“Fintech payment ecosystems are now being built on Dapi infrastructure in multiple regions. We can have the same impact in Mexico by enabling a wide range of in-app payment use-cases, including digital banks, digital wallets, P2P payment applications, crypto exchanges, custodians, and merchants,” he added.

This marks the first company in Mexico to offer free account data aggregation services to companies that use the payment API to accept payments. As Dapi’s technology relies on bank transfers, the company offers payments at rates dramatically lower than comparable payment mechanisms, such as cards.

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