Ripple (XRP) is being used for payments to Mexico and the Philippines

Ripple's plan to emerge as a leader in the field of global payment settlement was boosted when its partner, Mercury FX, successfully completed an international payment to the Philippines on March 5, 2019.

Many fintech companies are offering alternative financing channels at lower interest rates than traditional banks, with a more attractive and intuitive user experience.
Many fintech companies are offering alternative financing channels at lower interest rates than traditional banks, with a more attractive and intuitive user experience.

Mercury FX tweeted:

"Mercury has just made history by completing the first commercial payment to the Philippines using # xRapid ... The payment was made for an individual customer to pay for their honeymoon at the @edgewaterdive Spa Resort in that country."

In addition, the company mentioned that they were open for payment business with two countries: Mexico and the Philippines. The fact that the cryptocurrency movement between both nations was processed in seconds, suggests that technology for this purpose is radically improving.

According to Mercury FX tweets, people can now send money by opening an account that supports more than 40 coins. However, any payment of this type must be greater than £ 5,000 to be profitable.

At the recent Ripple Regionals conference, Alastair Constance, CEO and founder of Mercury FX, stated:

"We made our first commercial payments live a couple of weeks ago. So now we are making them for a UK company to import Mexican food. They are transferring much faster than the payments through Swift and at a much lower cost."

Constance revealed the company's future plans at the same conference, which involved expanding its xRapid corridors by installing stores in the Middle East and Canada.

In addition to Mercury FX, banks in the UAE (United Arab Emirates) are already preparing to establish xRapid brokers, according to Mohsen Al Zahrani, vice president of strategy and excellence at Saudi Payments. He also said that two banks in the UAE will come into operation soon.

SendFriend, another new company that focuses on international payments to the Philippines to help workers in the country who live abroad is already using xRapid.

@sarcasticlegend, a Twitter user, commented:

"But would not it have been easier for him and for the spa to prefund a Lightning channel ... send 20-30 smaller payments so as not to clog the system (so he would have a good chance of passing) and wait 24 hours praying that a node will not be disconnected during the transaction? What is the hurry? "

A Twitter user, @kalycabos, published:

"Congratulations and welcome to the new era of the international transaction business!"

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Finnovating sees in Mexico an opportunity for the Spanish 'fintechs'

Mexico, which has recently approved a 'Fintech Law', has a low financial inclusion and high penetration of connected telephones, offers "an opportunity" to the startups of the financial sector, according to Finnovating.

A large potential market, in a country with 129 million inhabitants, in which barely a third have a relationship with banks (37%), but twice with smartphones connected to the Internet, make Mexico a desirable market for companies. Fintech 'Spanish and European, has explained to EFE the head of international business development of the Spanish consultancy Finnovating, Paula Cárdenas.

"With the 'Fintech' Law passed in Mexico, the opportunity for international companies is more important, because it is the first country with this law," Cárdenas added.

This 'Fintech Law', approved last March and in force since September, regulates banking operations through technological means, electronic payments, collective financing companies ('crowdfunding') or cryptocurrencies, as well as establishing requirements for the security of electronic transactions and greater control of operations to prevent money laundering.

"It was approved by all the deputies, it did not receive a single 'no', and with it, investment has been increased in Mexico quite quickly," added Cardenas, who has assured that the Central American country is "consolidating" by its "opportunities" to this type of business.

Among the fintech businesses with more acceptance in the country are, according to this expert, the microloans, the loans with the payroll as collateral, and the electronic payment applications.

"The sector of 'insurtech' (technology applied to insurance), applications linked to investment or personal finance are also growing."

Cárdenas has ensured that the Mexican authorities are facilitating the arrival of innovative companies, and he denied that the change of government in Mexico changed with the arrival in December of President Andrés Manuel López Obrador.

"So far we have not received any negative perception of the new government, Mexico continues to grow rapidly."

This Spanish consultancy, specialized in bringing technology and finance startups into contact with large companies so that strategic agreements are negotiated, wants to "create a bridge between Europe and Latin America" by helping Spanish startups cross the Atlantic, starting with for Mexico.

For this, Finnovating will launch in April its first 'Unconference' in Latin America in Mexico City, which will be followed during the year in Colombia, Peru and Chile.

The 'Unconferences' are meetings between entrepreneurs and large companies, in which there is the first part of the presentation of the emerging companies and their business model, to then establish a time of private meetings between companies that can come to fruition in proposals of the deal.

For the Mexico edition D.F. this Spanish consultancy has detected 219 Mexican financial startups, from which they will select the 100 most relevant to participate in a meeting that will bring ten European fintech companies and large traditional companies that want to incorporate innovation.

Finnovating organizes several meetings with this format annually in Spain, divided by the specialization of the financial 'startups': wealth management (wealthtech), legal aspects (legaltech), technology applied to regulatory compliance (regtech), real estate sector (proptech) and insurance (insurtech).

Do you want to know how Fintech manages to improve financial services in Latin America?

According to the report of the Inter-American Development Bank and Finnovista, there are multiple possibilities for improving financial services.

For example, according to the GSMA, remittances sent through mobile devices are already the product with the highest growth in transaction volume (52% more) for the second consecutive year in Latin America.

Another study by Juniper Research estimates that the value of mobile international remittances will exceed 25 billion dollars in 2018, an increase of 67% since 2015.

Similarly, transactions through mobile devices have had a significant increase in the region. For example, in 2016 Brazil registered this type of operations as 34% of the total of those carried out that year.

According to the report generated by the IDB and Finnovista, the countries with the largest fintech startups dedicated to solutions for the market of consumers and SMEs excluded or neglected are:

Bolivia, El Salvador, Honduras, Nicaragua, Panama and Paraguay: 100% of the identified enterprises claim to have consumers and / or SMBs that are underserved / excluded as the main market.

Dominican Republic: 75% of its projects are focused on this market.

Venezuela: 60% of its fintech startups are dedicated to the aforementioned sectors.

Guatemala: 50% of the fintechs are dedicated to consumer markets and SMEs that have not been previously established.

Mexico: 52% offers solutions to these sectors.

The countries with the highest percentage of Fintech startups that are dedicated to the aforementioned groups are precisely those were the World Bank states that there are higher rates of financial exclusion.

In El Salvador, Nicaragua and Mexico, where over 50% of fintech ventures direct their services to this financially excluded segment, the percentage of adults with a bank account is below 40%.

In the rest of the countries, the percentage of adults with access to bank accounts is between 40% and 50%. There, the percentage of fintech dedicated to the sector is greater than 30%.

In addition to mobile payments and transfers, Fintech are offering products designed to improve access to various financial products.

For example, access to new models for obtaining credit or capital. This is because for many SMEs it is often impossible to prove a credit history or have the necessary traditional collateral.

Fintechs have developed alternative scoring systems with algorithms that analyze credit risk and allow decisions to be made about the solvency of a client.


Fintech companies, with a good outlook for 2019 in Mexico

The number of new financial companies based on technology platforms (Fintech) will continue to grow this year, as there is a need for the population for services that the financial market does not reach, said the director of the Startupbootcamp Scale FinTech Mexico program of Finnovista, Christine Chang.

"The growth is because there is a financial sector that is still very vertical: you have very few banks that cover the majority of the market and we have populations that are demanding more financial services, and Fintech solutions arrive much faster than a new solution from a bank " she pointed.

In an interview with Notimex, she added that besides a country like Mexico is growing, there are more people who work, who earn and need to have a bank account or some way to save and invest.

According to the second edition of the Fintech en América Latina 2018 report: growth and consolidation, developed by the Inter-American Development Bank (IDB) and Finnovista, Brazil provides the largest number of enterprises with 380, followed by Mexico with 273, Colombia 148, Argentina 116 and Chile with 84.

In addition, currently in Mexico, the six main segments are payments and remittances, loans, business financial management, personal finance management, crowdfunding, and business technologies for financial institutions.

In its report, Finnovista and the IDB highlight that, in Latin America, Mexico is the first jurisdiction that considers the adoption of open banking standards, this being one of the points included in the so-called Fintech Law, which was approved in March 2018.

"In Mexico, there is a huge illusion due to the already existing collaboration between Fintech and banks, some of which have already designed and launched their first open APIs," she said. 

In addition, she points out that the Fintech Law in Mexico has been a pioneering example of how to approach regulation from a holistic and proportional perspective.