Unlimint, a London-founded fintech which landed its electronic money institution (EMI) licence back in 2015, is ramping up its expansion across Latin America.
Last month, the fintech launched its local acquiring services in Mexico. Earlier in 2020, the start-up rolled out similar services in Brazil and Colombia.
“Our plan is quite aggressive here [in LatAm],” co-founder and CEO Andrey Novikov tells FinTech Futures. “We want to serve both international and domestic e-commerce players.”
In November, the start-up rebranded from old name Cardpay as part of its expansion plans. Unlimint is now gearing up for launch in Peru.
“We want to have global coverage, including every country in LatAm,” says Novikov.
Rise of Unlimint
Founded by Moscow-born Andrey Novikov in 2009, Unlimint has grown to 300 people across 14 international offices – from Singapore to Sao Paulo.
Novikov also serves as Qiwi’s vice president. Qiwi is a publicly traded Russian payment service provider which is currently being accused of securities fraud by its investors.
Unlimint claims it covers 95% of local payment methods in Mexico. As well as card acquiring, the fintech also offers alternative payment methods. These include mobile payments, e-wallets, cryptocurrencies, and direct bank transfers.
“Merchants can get all of them [payment options] through one API [application programme interface] integration,” explains Novikov.
“Nobody in LatAm provides this kind of solution. Players focus on cards or bank transfers, but not everything.”
In a blog post, Unlimint explains how the birth of its offering came from banks “failing to satisfy fast and booming online markets”. Instead, according to the start-up, banks have long focused on big players from the US and Western Europe.
This is beginning to change. Santander, for example, is investing increasingly more in Latin America through Mouro Capital, its venture investment arm which doubled funds to $400 million last year.
Novikov’s company, being private, has not disclosed its revenues – hence it’s unclear whether the firm is loss-making.
What he does say is that the start-up services “thousands of merchants”, and that it has invested around a million dollars into research and development.
Unlimint is yet to disclose the identity of any of its investors. It does say it intends to raise a round of funding this year.
Landscape in LatAm
According to World Bank data, only 19% of Latin Americans own credit cards. Just 6% own cards which can perform international transactions.
This means offering local payment options is essential for any international player trying to gain a substantial slice of the market. Instalment payments are also popular.
Novikov explains that banks in LatAm have long used instalment payment methods in physical shops. This process is now being transferring to digital platforms. Which could see a flurry of buy now, pay later (BNPL) firms from Europe, the US, and Australia flood the region.
Currently white-label BNPL start-up Addi, founded in Colombia, is expanding to Brazil and Mexico.
In both Brazil and Mexico, cross-border online purchases are less expensive than domestic orders. This means the countries’ cross-border e-commerce markets are growing much faster than their domestic e-commerce markets.
Latin America is therefore second only to China when it comes to the world’s fastest-growing retail e-commerce markets.
Brazil and Mexico compete for the region’s retail e-commerce spotlight, accounting for 32.5% and 28.8% of the market respectively, according to Statista. But countries like Peru and Colombia are attracting attention from players like Unlimint now too.
“E-commerce is growing very fast,” says Novikov. “Payment companies not ready for the sharp increase in e-commerce.”
Unlimint intends to bring its experience from Russia and Asia, where Big Techs have become dominant players in the e-commerce space.