November 2, 2023

Cash to Connectivity: Unlocking Opportunity in Latin America

At Money20/20 USA 2023, Cecilia Tamez, Dandelion CSO, moderated a panel exploring the growth opportunity in Latin America, a topic of critical importance and interest among financial industry players. Cecilia was joined by Roberto Kafati of DEUNA and Justo Benetti of Dlocal to discuss the development opportunities in Latin America.

Justo of Dlocal highlighted that the sizeable unbanked population and young demographic in LATAM poses an excellent opportunity for financial services looking for growth. He went on to point out that in the US, many companies only experience single-digit customer base growth. Meanwhile, LATAM markets have boasted steady double-digit growth for the past few years.

To further quantify the opportunity in the region, Cecilia shared that 8/10 cross-border payments go to low-to-middle-income countries. While many immediately think of India, the largest payment corridor in the world is, in fact, the US to Mexico. However, with 50% of the Mexican population underbanked, traditional cross-border payment rails are unable to unlock this market's true potential.

Interoperability is not built into legacy payment infrastructure, but customers in LATAM demand the ability for money to move between bank accounts, mobile wallets, and cash pickup locations. The sender of a transaction may be banked, but the recipient may not. To facilitate this, financial institutions need partners who can provide them with a multi-channel payment network.

While cash remains predominant in Latin America, the surge in digital commerce has opened doors to significant opportunities. The panel examined how this shift presents unique challenges and prospects for businesses seeking to enter or expand within the region. Latin America is burgeoning as a fast-growing market, yet it comprises 33 countries, each with diverse needs, cultures, and payment systems, posing intricate challenges that companies must navigate to succeed.

Cecilia offered a solution for firms looking to establish or strengthen their presence in Latin American markets. She advocated for leveraging local expertise through strategic partnerships to manage the inherent risks and complexities of the region's varied financial ecosystems.

The panel concluded that for firms ready to venture into Latin America, understanding and adapting to the local diversity is crucial. This involves not just recognizing the different consumer behaviors and regulatory environments but also appreciating the cultural nuances that influence business operations.

The insights from the panel at Money20/20 highlight a broader narrative: the transition from traditional cash systems to integrated digital financial platforms in Latin America is inevitable and ripe with potential. For organizations willing to invest the time and resources to understand this dynamic region, the rewards can be substantial.  

The path forward involves a thoughtful approach to partnerships, a willingness to adapt, and a commitment to navigating the rich tapestry that is Latin America’s market landscape.

To explore Dandelion's reach in Latin America, download our network catalogue here.

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