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June 7, 2019

Rappi announces plans to launch Visa debit card, Brazilan payments startup Celcoin raises $1.5M, Netflix collaborates with Latin American Youtubers to promote engagement, and more from the region…

On-demand delivery company Rappi announces plans to launch its own debit card

This week, Colombian delivery company Rappi announced plans to release its own Visa debit card.

Although the company already offers their own payment service, RappiPay, their future goals are set on becoming a “super app” that goes far beyond the delivery industry.

According to Kristen Hager, Director of Brand Alliances at Rappi,

“Our vision and what we are as a company is not just delivery, but a commercial company, a super app… We provide several services, at any time, for different types of consumers. With financial services, we are targeting the unbanked or underbanked sector in the region and creating a path that will help them” (Contxto).

As Nubank continues its rapid growth in Mexico and other neobanks compete for recruiting unbanked consumers in the country, Rappi hopes to obtain its respective share in the market.

In the long term, the company hopes to discover other possibilities for providing other banking services, such as savings accounts and credit lines.

Netflix collaborates with Latin American Youtubers to increase regional presence

According to Business Insider, Netflix has been promoting its new season of "Black Mirror" by releasing a miniseries called "Little Black Mirror” on YouTube. The miniseries was released on Netflix América Latina channel, featuring popular YouTube stars from across the region.

The Latin American YouTubers involved in this collaboration collectively boast over 37 million subscribers.

In creating local, influencer-based YouTube promotions, Netflix is working to tap into the growing SVOD opportunity in LATAM.

“YouTube provides a particularly attractive opportunity to bridge content with advertising, as YouTube stars are content creators and brands wrapped in one” (Business Insider).

By partnering with YouTubers with local popularity, Netflix aims to promote engagement with its content among Latin American consumers.

 “The SVOD market is rapidly growing in Latin America, signaling a major opportunity: Latin America hit an all-time high of 27.1 million SVOD subscribers at the end of 2018 and is projected to hit 51 million by 2024. In keeping with its broader strategy, Netflix is focusing on generating a presence that plays well in local markets by producing content in the region, made by local talent”

Photo courtesy of Business Insider

Netflix's Latin American Instagram has 4.9 million followers, in comparison to the US account’s 15 million followers. The company’s Latin American Twitter account has 2.08 million followers, compared to the US Twitter account’s 6.13 million.

Brazilian payments startup Celcoin raises $1.5M in latest funding round

São Paulo-based payment startup Celcoin announced they have closed their latest funding round at BR$6 million ($1.5 million USD).

Founded in 2016, Celcoin has a network of 15,000 SMBs, referred to as ‘agents’, who become points of sale in utilizing the Celcoin platform to allow people to pay for services. The company processes over R$120 million a month of bill payments.

Marcelo França, Celcoin CEO, stated  

“More than R$8 million in commissions for the sale of these services has already been granted to our users, and we’re just getting started… We want to become the complementary income for every micro-entrepreneur” (Contxto).

This latest funding round was led by Vox Capital. Daniel Izzo, Vox Capital CEO, sees great potential in the company and is confident in the transformative capabilities Celcoin’s platform offers for local communities.

“The app has transformed the lives of many people… The agent network is already serving more than a million people per month. Oftentimes, many of them don’t have access to payment branches or basic utility services” (LAVCA).
Photo Courtesy of Celcoin

Finnovista’s Mexican fintech report

According to Finnovista’s Mexican fintech report, the nation’s fintech ecosystem has grown by 18% from July 2018 to May 2019. During this period, roughly 100 new fintech startups emerged in Mexico alone.

According to Finnovista’s report,

“The increase in this number is affected by two phenomena… One one hand, we found the existence of 98 new startups created in recent months, which represents a gross growth of 29.3 percent. On the other hand, we have estimated that the mortality of fintech startups since last year amounts to 11.3 percent” (Contxto).

Last year, Mexico passed a Fintech Law that sought to provide increased legal certainty and security for both companies and investors. With the implementation of this regulatory law last March, Mexico became one of the first countries to enact legal framework for startups in the industry.

“On March 10, 2018, the Fintech Law became effective and established the foundations of a regulatory framework to facilitate the execution of financial transactions and services related to financing and investment through IT platforms or tools… whether through fintech institutions ("FTIs"), entities authorized to operate through regulatory sandbox models, or authorized Mexican financial entities ("Financial Entities")” (White & Case).

Mexico’s fintech enterprise has traditionally supported fintech institutions (“FTIs”) involved in payments, remittances, and loans, which (according to the report) represent roughly 40.7 percent.

The report also found that the digital banking industry grew by 200% during the designated time period between July 2018 and May 2019.

How payment technology could revolutionize travel brands in LatAm

Across Latin America, developments in payment technology have shown immense potential for revolutionizing the travel market: a sector that represents a substantial percentage of the region’s total GDP.

According to IATA, the Latin American market will grow 3.8% annually in air travel alone, and contribute $353 billion in GDP by 2037.

Phocus Wire reports that the Latin American e-commerce market is projected to grow to $80 billion this year: doubling in size from $40 billion in 2016.

These projections are closely related to the rise of the mobile channel and developments in payment technology. Roughly 40% of Latin Americans now book their travel on mobile devices.

“More than 85 million new smartphones have been put in use in Latin America since 2016, and smartphone adoption rate is projected to exceed 71% by 2020, ahead of the global average of 66%” (Phocus Wire).

As made evident by the recent market report, global mobile wallet platforms in the region expand far beyond big names like Apple Pay and Google Pay. Therefore, it is crucial for travel merchants in the region to support the local AFPs that have local popularity depending on the specific countries in which they operate.

“From Boletos in Brazil, Cabal in Argentina, and OXXO in Mexico, travel merchants must balance popular regional AFPs with global digital wallets to stay ahead of consumer expectations.”

The growing percentage of Latin Americans booking travel on mobile devices showcases the necessity for airline and travel merchants to incorporate mobile channels as a central component to their payment strategy.

Heineken to invest $139M in Brazilian plants

Heineken NV released a statement announcing it will invest 550 million reais ($139 million USD) to renovate four of its plants in Brazil.

According to Reuters, the company plans to renovate four of its plants in São Paulo: located in the cities of  Araraquara, Itu, Jacarei, and Campos de Jordão.Heineken also announced plans to open a new distribution center in Brazil’s most populated state, São Paulo.


Video: Fintech regulation in Latin America

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