Mexico’s Fintech Boom: A Billion-Dollar Industry Set to Skyrocket

The fintech industry in Mexico is growing rapidly. As the nation passed the first fintech regulations in Latin America, the overall industry conditions have improved, and consumer interest in fintech is also increasing. Consequently, the potential for future growth is considered limitless.

According to global market research institution Statista, as of 2022, Mexico’s fintech transactions totaled $86 billion, a 23% increase from the previous year. Last year, it recorded $121.5 billion, expected to grow to $140.7 billion next year.

Mexico also has the second-highest fintech companies in Latin America, after Brazil. As of 2022, there were over 650 fintech companies in Mexico, a 26% increase from the previous year and an average annual growth of 18% over the past four years. Strategic alliances and collaborations within the financial ecosystem, sales strategy innovations, and improvements in product portfolios are all credited to this growth.

There is a growing number of companies utilizing fintech technology. According to Finnovista, a company specializing in fostering fintech startups, the number of companies using open finance and API (Application Programming Interface) increased by 16% and 14% between 2021 and 2022, respectively.

Additionally, according to a survey conducted by the fintech specialized magazine Fintech Rader, 44% of companies used AI technology, including machine learning. This number represents a substantial rise over the meager 28% in 2021.

The regulatory environment is also supporting the growth of the Mexican fintech market. In 2018, Mexico became the first country in Latin America to enact fintech-related legislation. The “Law for Regulating Financial Institutions (Ley para Regular las Instituciones de Tecnología Financiera),” also known as the Fintech Law, aims to regulate the private sector’s financial organizations, operations, and functions.

The Law for Regulating Financial Institutions’ primary provisions cover regulations for crowdfunding platforms, digital asset regulations, including virtual assets and cryptocurrencies, electronic payment fund regulations, promotion of open banking, regulatory sandboxes, and consumer protection.

“The people of Mexico are quickly adapting to new products and services,” an industry insider stated. “The fintech ecosystem in Mexico is being positively evaluated due to the large potential user base and the wide range of applicable services.”