MXPE Weekly Essentials

Tech startups and establishment firms converge, unemployment, negotiating interest rates, and other highlights in Mexican politics, policy, and markets from the past week.

Wise, a British digital remittances company, announced that it was arriving in Mexico to “transform international money transfers.” Last year, it was digital banking app Revolut, promising much the same after it acquired a licence to operate in Mexico. The fanfare surrounding each announcement contrasted with how full with the same platitudes each release was: Wise and Revolut, along with every other financial technology company, has been promising and largely failing to deliver on the disruption of a country that stubbornly resists ditching cash.

It’s a big reason why brick-and-mortar efforts by convenience store chains and the government have moved to the payments and banking space. Yet, fintech startups have continued to bank on digital transformation, resulting in the presence of 773 fintechs in Mexico, likely having overtaken Brazil—a country 60% larger—last year.

Just like the Brazilian market is consolidating (read, seeing a fall fintech startups), so might Mexico. It isn’t that Mexicans have wholeheartedly embraced digitalisation as much as the fact the country is in the midst of a peculiar tipping point. As tech becomes increasingly ubiquitous, established companies are being forced to adopt it while previously newfangled startups are struggling to differentiate themselves from the crowd.