As originally published on Florida Trend.
In Latin America, cash is used in at least 80% of consumer transactions — more than twice the rate of cash transactions in the U.S., according to some estimates. But efforts to digitize cash and financial services are increasing in the region, thanks to a surge in smartphone use and a push by banks and fintech startups.
Visa is helping spur that collaboration at its Miami Innovation Center, which brings together Visa’s Latin American clients, such as banks and key retailers, with its own specialists and cutting-edge fintech firms. In May, Visa made its first direct investment in a Latin America-focused fintech firm when it led a $12.5-million funding round for regional mobile-payments pioneer Yellow Pepper, which was founded in Mexico and now is based in Miami.
“If you look at the fintech ecosystem in Latin America, a few years back, it was developing very slowly compared to other regions,” says Vanesa Meyer, an Argentina-born executive who leads innovation and strategic partnerships for Visa’s Latin American and Caribbean region out of Miami. “But last year, over 100 fintech deals closed in the region, double 2016, and in the first part of 2018, the pace accelerated.”
Analyst Lindsay Lehr, a director at Miami-based Americas Market Intelligence, says only a global heavyweight like Visa has the clout to bring together both large and small players to speed the rollout of new financial services technology in Latin America.
Even traditional banks in the region recognize the need to innovate, as fully digital banks have started to emerge in their markets. “Banks and others are looking to Visa to help them become more agile,” says Lehr.
Among Visa’s partners in the fintech push: Miami-based NovoPayment, whose technology, says CEO Anabel Perez, serves as “connective tissue” among technologies, so banks and others can leverage existing assets without having to build apps and interfaces. NovoPayment now handles more than $350 million in transactions yearly, works in six Latin American nations and employs 300 people.
“By collaborating, you augment your capacity, increase efficiency, reduce R&D expenses and help others boost their capacity,” Perez says. “And in Miami, we’re just an Uber ride away from Visa.”
— Doreen Hemlock