Payment processing platforms see an opportunity in collaboration with Electronic Payment Fund Institutions (IFPE). Although its business model is limited by regulation, there are opportunities for growth.
The Law to Regulate Financial Technology Institutions, also known as the Fintech Law, establishes the terms for the operation of the IFPEs, regulations in which they establish controls to protect the funds of the users of these institutions, although they limit their activities with respect to other financial entities.
In this context, the managers of the Paymentology payment platform indicated that despite the limitations of the business models for IFPE, there are growth opportunities for these institutions.
“The information that exists on the transactions carried out by these financial technology companies can help define the behavior of their users, which can be used for the platforms to offer a service through an alliance with another company,” said Alejandro del Río, director Regional for Latin America of Paymentology.
Through the Fintech Law itself, the use of application programming interfaces (APIs) is established, a technology that is used to establish an alliance between a fintech and some other firm.
Due to this, Adrián Ramírez, regional advisory director of the payment processing firm, indicated that the implementation of APIs is an opportunity to generate a business model in the regulated fintech sector.
“Offering both the information, as well as ensuring its sending and receiving for review are the standards that financial institutions are looking for, in addition to expecting a provider that meets the security requirements with respect to all existing regulations,” said Ramírez. .
Integrate services
Different IFPEs have adopted the integration of services as their business model, one of them is Mercado Pago, a subsidiary of the Mercado Libre trading platform that announced at the beginning of the month that through its investment section in alliance with the brokerage firm Grupo Bursátil Mexican, its users exceeded 1,000 million pesos in investment.
In the case of Mercado Pago, in addition to the collaboration it has with GBM, it has announced alliances with other firms so that they offer their service through the IFPE platform, including the purchase of cryptocurrencies; insurance contracting; options for sending and receiving remittances.
Currently 55 Financial Technology Institutions (ITF) are regulated and operate under the provisions of the Fintech Law, of which 21 are Collective Funding Institutions and 34 are IFPE, therefore the number of entities in the sector already exceeds other regulated such as Commercial Banking, which has 50 authorized entities.
In the case of the ITF, only 41 are in operation, according to information from the Catalog of the Mexican Financial System.
