You would think that in 2018 you could pay almost any bill online. But that’s not the case in many Latin American countries, although the process is becoming easier.
While companies such as Xoom, Multicaja, and Nequi are streamlining online payments in Mexico, Chile, and Colombia, respectively, many people still find themselves queuing up in three-hour lines to pay their utilities, credit cards and other bills every month.
One expat in Mexico explained how he used five different payment methods for his electric bills over ten months because the rules changed each time.
So how do people keep track of their payments and wade through the bureaucracy each month to pay their bills? What happens if you send a payment late or the providers send the bill to the wrong tenant? It depends on the country.
Note: Portal Finance recently closed a $200M deal with one of Latin America’s largest investment banks, BTG Pactual, to provide financing to small and medium businesses across Latin America. They were also winners of Magma Partners’ Latin America wide Fintech competition in 2016.
After growing up in the Bay Area, Diego Caicedo left Popayán, a small town in Colombia, at age fifteen to go to university in Bogota, then dropped out two semesters before finishing his degree in engineering. Why? He had a plan to build a massive, vertically-integrated coffee company that bridged the US and his native Colombia. Three years later, a strong La Niña year wiped out the coffee industry and he was back at square one.
Diego has never been one to give up after his first failure, though. In this episode, we talk about how he rebounded after closing his first business, how Diego became an entrepreneur in Chile’s mining industry, then how he realized the opportunities in Latin American fintech and started Portal Finance to help small businesses get liquidity when they need it. Diego is a lifelong entrepreneur with a lot of lessons to share with people just getting started, so check out this episode of Crossing Borders to learn more about how Diego does business across Colombia, Chile, and the United States.
Only 11% of Latin Americans have access to credit from formal institutions. In fact, in Chile, 37% of adults have no accounts with a formal financial provider, even though Chile has one of the highest levels of financial inclusion in the region.
In comparison, under 40% of adults in Colombia, Mexico, and Peru have formal bank accounts. However, in one of the most chronically underbanked parts of the world, improvements in financial technology have opened the doors for widespread financial inclusion throughout the Latin America.
More and more people are accessing mobile payments, credit systems, and P2P lending opportunities through recent advances in local fintech, and investors are catching wind of the enormous opportunity.
While there have been considerable advances in financial technology in Latin America in the past five years, many tools are still only available in the countries where they were founded. A report by Oliver Wyman, released in September 2016, provides a snapshot of local fintech players in Chile, Brazil, Mexico, and Colombia.
I’m excited to announce that Portal Finance is the winner of our FinTech competition and is now part of the Magma Partners portfolio. Portal Finance stood out from of the multitude of companies that applied from all over Latin America because of founders Diego Caicedo, Felipe Puntarelli and Nicholas Bohorquez’s deep experience in the market and the ability to translate it into a top notch product with clients in multiple countries that can expand worldwide. (more…)