American mobility giant Uber kicks off its fintech business in Mexico, the latest move from the tech company to ramp up financial services overseas.
San Francisco-based Uber, which completely disrupted the transportation industry, recently received a fintech license from the local regulator in Mexico. It will allow the ride-hailing app to enhance its services in Latin America’s second-largest economy, potentially paving the way to virtual wallets and debit and credit card products in a country of 130 million.
Almost a decade after its foundation, the tech firm made a global push into the fintech sector. It introduced Uber Money in 2019 in the U.S. and has since replicated it in new countries. Earlier this year, it also struck a partnership with payments fintech Stripe to cut costs and incorporate new ways to pay, the latest illustration of its global fintech strategy.
With the recent license in Mexico, Uber wants to expand fintech services in one of Latin America’s most coveted markets. Uber reports over 200,000 drivers and 8 million customers in the country, according to 2021 company figures.
The company requested the license in 2019. Mexico’s fintech law mandates that companies must seek a license to provide digital banking services. But the process has proved to be laborious, with only dozens of fintechs firms being able to actually secure approvals.
However, the fintech sector in Mexico has made tremendous growth in recent years, with the number of financial technology firms expanding at double-digit rates. The digitization of Latin American societies has drawn interest from large traditional banks as well as non-financial firms to start offering digital services.
There are now 650 companies in the ecosystem, according to Finnovista. This is up from roughly 500 by the end of 2021.
The American firm introduced its digital wallet years ago in the U.S., with the intention of providing users with real-time access to trip earnings. It also offered Uber debit cards and accounts to its drivers and a Visa credit card.
But while it expanded Uber Money to other markets since, the service was still not available in Mexico. The company is keeping its plans under wraps for now. However, it is expected that this new means of payment will enable users to store funds in a digital account, as well as have access to cards.
Uber said the new license would strengthen its overall user experience in Mexico. “Payment processing for the app will remain the same,” a spokesman told Fintech Nexus. “This process is focused on optimizing the experience within the app, and the license opens doors to new possibilities in the future.”
Uber’s move is preceded by the experience of mobility competitor Didi. The Chinese ride-hailing app launched Didi Pay and Didi Loans in Mexico. In just two years of operation, it claims it has granted over 5 million loans.
Uber declined to comment on whether it would launch credit capabilities in the future, or what the roadmap for its fintech products will be.