Over the past few years the Latin American fintech sector has been
growing steadily, capturing the attention of the global market and
even adapting well to the Covid-19 situation.
One person interested in this market is Mario
Shiliashki, CEO Payments at PayU, a
company that provides payment technology to online merchants. Mario
is a payments veteran and has held positions at both
Mastercard and Paypal prior to
joining PayU, and is also an advisor to Metamorphic
Ventures in NYC. In his early career, Mario was an equity
analyst at Goldman Sachs and subsequently a strategy consultant at
Bain. He holds an MBA from Harvard Business School
and a Bachelor of Science degree in Finance and Economics from
Here Mario discusses the Latin American fintech sector and how
governments have been relying on and investing in fintech to keep
the economy ticking.
Mario Shiliashki, CEO
Alongside âcoronavirusâ, âpandemicâ and âvaccineâ,
âresilienceâ is right up there with the most used words of
One sector which has shown not only resilience but real growth
during the past year is
fintech in Latin America. The crisis has sparked significant
change in a region that was already demonstrating its agility,
adaptability and appetite when it comes to financial services.
Despite ongoing social and political pressures, the market has
boomed over the past decade. Since 2014, fintech funding in Latin
America has grown from less than $50 million to top $2.1 billion in
just six years. In total, fintech in Latin America is estimated to
have a valuation of more than $150 billion. This eye-watering
amount has truly captured the worldâs attention and continues to
dilute the spotlight from other markets, such as Asia.
There are a number of factors behind this incredible rise, which
is transforming the region â regulation, government backing,
skyrocketing internet and mobile penetration, and of course, huge
adoption in e-commerce â both local and cross-border.
Strong government drives to increase foreign direct investment
have proven effective, with businesses capitalising on tax and
investment incentives in the region. Such incentives have not just
targeted businesses, but also individual consumers. In Colombia,
the government instigated VAT-free days as an initiative to
kickstart spending and halt economic contractions. As a result, we
at PayU recorded sales rise by at least seven times that of regular
shopping days. This is a great example of how the government has
collaborated with both fintech and e-commerce platforms to make
sure theyâre ingrained across Latin America.
In this dynamic and thriving market, fintech players are
offering tangible benefits to both businesses and consumers alike,
which is particularly beneficial in a time of crisis.
As an online payments provider, weâve witnessed high levels of
fintech adoption first-hand, with a strong migration towards
e-commerce being one of the most clear-cut trends. Both domestic
and international merchants are working quickly to implement
e-commerce platforms built on the shift in consumer behaviours that
are clearly here to stay.
In the first seven months of 2020 alone, we processed in excess
of 120 million transactions for more than 25,000 merchants in Latin
America. This represents over 70% growth over 2019 â a truly
meteoric rise, which is showing few signs of slowing. Long periods
of isolation at home translated into increases in online
entertainment consumption, with payments for streaming platforms
averaging monthly increases of 100% compared to the same period in
2019. Similarly, home and garden improvements rocketed over 130%
between January and July, with people no longer being able to put
off DIY projects. Keeping up with this demand requires the ability
to scale and grow online seamlessly, which is where a global
payments partner with local expertise is invaluable.
Although fintech in Latin America has remained resilient, the
pandemic is not over, and nobody has a crystal ball. As borders
begin to re-open, global e-commerce remains the best way for
merchants to safeguard themselves for the long-term effects of
Covid-19. Merchants wanting to capitalise on the surging demand for
e-commerce must seek expertise from an informed partner; Latin
America is an exciting albeit complex and diverse region. Payment
technologies that make the shopping experience adaptable to
different consumer needs, frictionless and safe are integral to
Ultimately, thanks to the welcoming regulatory landscape and
skyrocketing internet penetration, thereâs never been a better
opportunity for both international and domestic merchants to
maximise on Latin Americaâs e-commerce opportunity. I, for one,
cannot wait to see this region continue to flourish, both in
e-commerce and into a global fintech hub.