The challenges and the opportunities of the FinTech regulation in Mexico
FinTech Regulatory Challenges in Mexico report, established by Banxico, tells us that technological advances are not only being developed on new infrastructures but offer the possibility of innovating on existing financial infrastructures.
- Why are Mexican authorities taking measures to incorporate FinTech regulation into a legal framework?
Firstly, Mexico is incorporating this regulation in order to give some legal setting to this new industry, which covers new market segments (traditionally uncovered by banking institutions), offering an easier access and developing more practical services for the client. By providing prudential rules in finance risk and establishing limitations and utmost amounts for transactions, Banxico provides financial stability. In order to have greater diversity and lower cost in the provision of financial services, they encourage a healthy competition. Finally, the role of Banxico is to prevent the use of FinTech activities for purposes of terrorism financing and money laundering. Its role is also to protect data of users of financial services which establish both clients’ and investors’ identification standards. To protect FinTech investors and clients, FinTech will not be allowed to make any guaranteed returns on investment or guarantee any result or success of investments. Also, the initiative prohibits senior executives to apply for crowdfunding financing.
- An opening into payment alternatives
|Prepaid Cards||Direct Debit||Mobile Payments||PayPal|
As an example, Telmex offers banking capabilities to most of the population using prepaid cards.
Starting in 2002, bank customers can authorize a corporation to request charges from their account for the payment of goods or services (without cards).
In 2019, 73% of the population should use mobile devices. Numerous FinTech have grown on this niche, developing some payment facilities only available on smartphone (even without a banking account).
Paypal offers e-payment and transfer services accepting various type of cards.