- How many fintechs are there in Mexico in 2024? With over 700 fintech players operating in the country, Mexico positions itself as a leader in Latin America, standing out in digital payments, blockchain, and inclusive financial solutions.
- Challenges in the Fintech sector: Mexican fintechs face challenges such as uncertain regulation, increasing competition, and the need for financial education to promote broader adoption of their services
The fintech industry in Mexico found itself at a pivotal moment in 2024. With sustained growth, these companies are revolutionizing access to and efficiency of financial services in a country where financial exclusion remains a significant challenge.
This article explores the current landscape of the Mexican fintech market, highlighting its impact, the most relevant figures, and the factors influencing its development.
How many fintechs are there in Mexico in 2024? The Current Landscape in Mexico
The term “fintech” in Mexico has two key interpretations:
- Legal definition: Institutions regulated under the Law to Regulate Financial Technology Institutions (LITF).
- Broader interpretation: Companies that integrate technology into their financial operations, regardless of their regulation.
According to the broader definition, many companies are leveraging technology to offer innovative financial services, even outside the regulatory framework. This creates a dynamic ecosystem but also presents challenges in terms of oversight and fair competition.
According to the Study of Competition and Free Market in Digital Financial Services by the Federal Economic Competition Commission (Cofece), whose dissolution was recently approved by the Mexican government, traditional Mexican banking generates higher profits than other countries in the region, due to its high net interest margin and profitability. However, these figures contrast with the reality of millions of Mexicans:
- Half of the adult population does not have a bank account.
- Nine out of ten people lack a credit card.
- Only one-third of the population has used digital payment methods.
Despite the growth of the sector, Mexico continues to face high financial exclusion. According to the 2021 National Survey of Financial Inclusion (ENIF):
- 50% of Mexican adults have a bank account or equivalent.
- 35% of the unbanked mention lack of income as the main reason for not opening an account.
- Only 21% of adults save in formal instruments, while 54% use informal mechanisms.
These figures reflect cultural and structural barriers that limit the adoption of financial services, a key opportunity for fintechs.
This context highlights a significant gap in financial inclusion, which fintechs are attempting to close with innovative and accessible services.
In 2024, Mexico is positioned as one of the largest fintech ecosystems in Latin America. It is estimated that there are over 770 fintech players in the country, covering sectors such as payments, credit, crowdfunding, insurtech, and wealthtech, according to the 2024-2025 Fintech Business Guide by Ey Law.
The sector’s growth has been exponential since the enactment of the Fintech Law in 2018, which laid the foundation for the regulation of Financial Technology Institutions (ITF). Currently, fintech companies operate under legal figures such as:
- Multiple banking institutions
- Popular Financial Societies (Sofipo)
- Multiple Purpose Financial Societies (Sofom)
- Electronic Payment Fund Institutions (IFPE)
- Crowdfunding Institutions (IFC)
Each figure has unique regulatory characteristics, although some were not specifically designed for fully digital models, creating challenges of regulatory arbitrage and a lack of uniformity in supervision.
Impact of Fintechs on the Mexican economy
Fintechs are transforming the Mexican financial system by offering more efficient and accessible services. Some of the main advantages include:
- Reduction of operational costs: By not relying on physical branches, these companies can offer more affordable services.
- Increased financial inclusion: Fintechs are serving historically underserved sectors, such as small businesses and informal workers.
- Intensified competition: They are challenging traditional banking, forcing it to innovate and improve its offerings.
However, the growth of the sector also raises important questions: How will traditional banks respond? What role will tech giants play? How will regulation influence this emerging market?
Despite the growth of fintechs, the use of their services still faces structural barriers in Mexico:
- Lack of internet connectivity: Although access has improved, there are still regions with low digital penetration.
- Informal economy: The size of the informal economy limits the adoption of formal financial services.
- Preference for cash: A large part of the population prefers to make transactions in cash.
- Deficit in financial education: Many people lack the knowledge needed to take advantage of digital services.
These factors indicate that the success of fintechs depends not only on their innovations but also on cultural and structural changes in the country.
Regulation plays a critical role in the development of the fintech sector. While figures like Sofipos and IFPEs face stricter regulations than traditional banking in certain areas, such as operation with correspondents and contingency plans, other areas present risks of regulatory arbitrage.
For example, some similar activities between fintechs and banks do not have the same regulation, creating an uneven competition. This underscores the importance of equitable oversight that fosters innovation without compromising the stability of the financial system.
Regulatory and structural challenges for the Fintech sector in Mexico
The growth of the fintech ecosystem is not without its challenges. Some of the main issues include:
- Unequal regulatory flexibility
While authorities have relaxed certain regulations to adapt them to the digital environment, this tends to occur first in traditional banking and later in other financial institutions such as Sofipo and IFPE. This creates unnecessary barriers and limits the capacity for innovation in these latter entities.
- Difficulties with multihoming
Technology enables users to utilize multiple financial providers, but several obstacles make this difficult:
- Preference for cash, supported by a dependence on physical branches and ATMs.
- Costs associated with switching financial providers, reinforcing brand loyalty.
- Exclusion of Sofipo and IFPE from the payroll portability system.
- Risks in the credit market
Fintech business loans have grown more slowly than consumer credit, due to regulatory limitations that prevent the full digitalization of the onboarding process. Additionally, many fintechs operate as non-financial companies, avoiding regulatory restrictions but generating risks that are difficult to assess.
- Delay in Open Finance
While the concept of open finance promises to revolutionize the personalization and accessibility of financial services, the lack of secondary regulation limits its implementation in Mexico.
Innovations and trends: the transformational role of Fintechs
Despite these challenges, the fintech sector continues to make significant strides:
- Innovative models: Introduced by the LITF (Fintech Law), these allow fintechs to test innovative technologies within a flexible regulatory framework. However, to date, the CNBV (National Banking and Securities Commission) has not authorized any company under this framework due to ambiguity in its definition.
- Digital Banking: Companies such as Bineo, Hey Banco, Openbank, and Revolut have obtained authorizations to operate as banks, consolidating a hybrid model between fintech and traditional banking.
- Growth of Sofipos: These entities are attracting more interest due to their ability to capture and place resources, making them a viable option for expanding fintech companies.
Key gegments within the Fintech ecosystem
The Mexican fintech ecosystem is diverse, with companies operating in the following segments:
- Lending: Fintechs that offer consumer and small business financing.
- Payments and remittances: Digital solutions that simplify both domestic and international transactions.
- Insurtech: Innovations in insurance that improve customer experience.
- Wealth management: Tools for investment and wealth management.
- Open Finance: Platforms that enable the integration of financial services based on shared data.
How many fintech companies are there in Mexico in 2024, and what does the future hold?
With 773 fintech companies in operation, Mexico is at the forefront of digital financial development in Latin America. This sector not only improves financial inclusion but also fosters competition, drives innovation, and creates new business models.
However, the path toward a fully inclusive and digitized market requires joint efforts from fintech companies, regulators, and users. Flexible regulation, financial education, and technological adoption will be key for fintechs to continue closing the gaps in the Mexican financial system.
