Strategy Note /

The Ultimate Guide to Mexico fintech

  • Mexican fintechs are winning market share from informal providers. Extensive financial exclusion could also fuel growth

  • Strategic priority: Expanding into new markets. Top value to customers: Fast approvals. Innovation focus: AI, blockchain

  • Key challenges: Scarcity of talent, funding access. Regulatory hurdles: Deposit insurance, client account segregation

The Ultimate Guide to Mexico fintech
Rahul Shah
Rahul Shah

Head of Corporate & Thematic Research

Tellimer Research
26 January 2023
Published byTellimer Research

Mexico, Latin America’s second-largest economy, suffers from poor financial inclusion, with around 60% of adults not having a bank account (World Bank). A key reason for this is the lack of incentives for banks to meet the needs of lower-income customers (Microvest). Our proprietary consumer survey shows traditional financial institutions have double the market share of fintechs, but the gap between the two should narrow.

Digital lending is the biggest component of the Mexican fintech ecosystem, accounting for almost one-in-three firms, closely followed by digital payments firms. Since our 2020 survey, the fintech ecosystem has become much more diversified. 

According to Statista, the value of digital payments transactions in Mexico has increased by 40% CAGR over the past five years, reaching US$71bn in 2022. Banxico (Mexico’s central bank) is also encouraging the adoption of Cobra Digital (CoDi), which leverages QR-codes and near-field communication to allow consumers to use their smartphones for digital payments.

Our analysis of over 170 Mexican fintechs within our database of 3,400 emerging market firms helps us position the country in a global context. It shows that while two-thirds of fintechs are already profitable, the remainder expects to become profitable within a year; this is a superior profit profile versus global peers. Looking at growth trends, Mexican fintechs are generating faster user growth than their emerging market peers but average revenue per user is declining more rapidly. Consequently, operating profit and operating margin trends are also lagging.

Mexico fintechs’ targeted KPIs are user numbers, transaction value, and gross margin. The main factors they credit for their success to date include user-friendly platforms, seamless execution, and fast transaction speed. The top values they believe they deliver to their customers include fast approvals, seamless execution, and unique offerings.

Turning to strategy, Mexican fintechs plan to expand into new markets, introduce new products and services, and enter new customer segments. Planned innovations focus on artificial intelligence, blockchain technology, and cryptocurrency functionality.

Their main growth constraints are the scarcity of talent and funding. Funding is also an issue at the macro level; according to the World Bank, FDI inflows were equivalent to 2.6% of GDP in 2021, well below the global emerging markets average of 4.5%. Deposit insurance and client funding account segregation are the biggest regulatory hurdles Mexican fintechs face.

In this report, we take a detailed look at the Mexican fintech landscape, including:

  • The current state of the fintech ecosystem

  • Electronic payments statistics

  • Key industry growth trends

  • Profitability versus EM peers

  • Financial services provider market shares and expected three-year changes

  • The key performance indicators fintechs are targeting

  • The competitive environment

  • Fintechs’ values and success factors

  • Fintechs’ plans and targeted innovations

  • Fintechs’ growth constraints and regulatory hurdles

We also compare our current findings with those from our 2020 industry survey.

Mexico’s fintech landscape is overweight Lending and underweight Blockchain

Lending and Payments are the biggest components of the Mexican fintech ecosystem, with 31% and 27% of fintechs specializing in these areas. While the weight of Payment fintechs is in line with the global emerging markets average, Lending is overweight by 8%. In contrast, Blockchain and Investech have a smaller presence in Mexico than elsewhere. 

Mapping Mexico's fintech ecosystem

If we compare the results of this survey with that carried out in 2020, the main change has been growth in the proportion of Other firms, from 13% to 19% of the total ecosystem. In contrast, Payments have dropped from 31% to 27% of the universe. Other firms comprise those active in areas such as crowdfunding and credit rating.

Mexico fintech: Change in sector weights since 2020 survey

Mexico’s digital payments values are rising steadily

The value of digital payments transactions in Mexico has increased by 40% CAGR over the past five years, reaching US$71.1bn in 2022 (annualised from 10-month data to October 2022). According to Statista, the largest segment in this category is digital commerce.

Banxico (Mexico's central bank) is encouraging the adoption of Cobra Digital (CoDi) in retail payments. CoDi leverages QR-codes and near-field communication to allow consumers to use their smartphones for digital payments, with money moving via Mexico’s real-time gross settlements payments system,  SPEI (Interbank Electronic Payment System).

Mexico: value of online payments transactions

Mexican fintechs have high user growth but ARPU trends lag

Our detailed study of 215 fintechs across 14 emerging markets enables us to draw out key differences at the sector and market levels. Mexican fintechs are generating higher user growth than their emerging market peers. But average revenue per user is declining at a faster pace than in other EMs, suggesting customer loyalty is proving elusive. Growth in operating profit and operating margin trends also lag global peers. These challenges are reflected in the targeted KPIs of Mexican fintechs, with transaction value and gross margin featuring heavily.

Fintech growth Mexico and emerging markets

More Mexican fintechs are now profitable than their EM peers

The profitability profile of Mexican fintechs is slightly better than the emerging markets average, with two-thirds of local firms being profitable. Also, the remaining fintechs expect to become profitable within the coming year. Despite historically inferior margin trends, Mexican fintechs have been better able to build profitable business models than their global peers.

In our 2020 survey, 10% of Mexican fintechs were already profitable and 30% expected to be profitable within a year. The remaining 60% is expected to be profitable in more than a year. Our more recent survey suggests most of these fintechs were able to hit their profitability timelines.

Fintech profitability: Mexico versus global emerging markets

Mexican consumers see fintechs gaining market share in general insurance

We asked 900 consumers in 14 emerging markets about the types of providers meeting their current financial service’s needs, and those they expect to use in three years. This data allows us to estimate the current market share of the different industry players and likely future shifts.

Currently, fintechs have a 26% market share in Mexico and consumers expect this to rise to 32% in three years. In contrast, EM fintechs have a 31% market share currently, rising to 37% in three years. From a consumer perspective, therefore, Mexican fintechs have a smaller market presence than their global peers, and this difference is expected to persist.

Mexican consumers also expect the market share of traditional financial institutions to rise, from 48% to 52%. In contrast, they see informal channels and financial exclusion as losing their share.

Note that the survey responses are unweighted; we think traditional financial institutions would have an even higher market share if our survey were value-weighted.

Financial services provider market shares in Mexico

Products where Mexican fintechs are already the market leaders include mobile payments, current accounts, domestic money transfers, and savings/fixed accounts. The biggest fintech market share increases are projected for general insurance and business/property loans. Savings/fixed accounts is the only product area where consumers see a decline in fintech market share over the next three years. Somewhat surprisingly, Mexicans with at least one financial product with a formal financial institution has regressed slightly, from 68.3% in 2018 to 67.8% in 2021, according to the National Inclusion Report (ENIF). This suggests that fintechs and other alternative service providers will be key to reducing financial exclusion levels in Mexico.

Mexico fintech: market share by product

Targeted KPIs: Number of users, transaction value, gross margin

According to Mexican fintechs, number of users, transaction value, and gross margin are the key performance indicators they are targeting. In contrast to other emerging markets, Mexican fintechs are more focused on gross margin, number of active users, and product pricing. They are less exercised than global peers by bottom-line growth, profitability measures, and brand strength.

In our previous survey, customer loyalty, transaction value, product and service innovation, and brand strength were the top targeted KPIs for Mexican fintechs. The focus on all these factors has declined in the more recent survey.

Number of users

Growing the user base is key to generating scale and opening the door to cross-selling/up-selling opportunities. Mexican fintechs focusing on growing their customer base include Konfio (Lending).

Transaction value

This is the KPI most frequently targeted by Mexican fintechs and is also one of the main metrics used by investors to assess operators, particularly in the payments segment. Firms actively targeting transaction value growth include Clip (Payments).

Gross margin 

Once a certain level of scale is achieved, fintechs can typically then focus more on generating financial returns for their investors. A higher gross margin allows companies to lift investment in branding, marketing, and product development. Mexican fintechs targeting to expand gross margin include Prestadero (Lending). 

Mexico fintech: Targeted KPIs

The competitive landscape for Mexican fintechs

Mexican fintechs regard other fintechs as their strongest competitors, followed by traditional financial services firms and the informal sector. Meanwhile, family/friends of the customer, media firms, and telecom firms are not much of a concern for them.

In other emerging markets also, fintechs typically consider other fintechs as the biggest competitive threat.

In our previous Mexico survey, traditional financial services firms were regarded as the biggest competitors followed by other fintechs, and the informal sector. The perceived threat from traditional operators has fallen sharply, while that from the informal sector has risen the most. Competition from other fintechs has also increased; we think the growing presence of foreign-headquartered fintechs has likely contributed to this perspective, with Brazil’s NuBank being a high-profile example.  

Mexican fintechs' main competitors

Mexican fintechs' customer value proposition: Fast approvals, seamless execution, unique offerings

The key values delivered by Mexican fintechs to their customers are fast approvals, seamless execution, and unique offerings. Relative to fintechs in other emerging markets, those in Mexico place more importance on these three factors and are less focused on security, responsiveness to customer needs, and transparency in pricing and services.  

In our previous survey, personalised service, company brand and affiliation, and fast approvals were the top values provided by fintechs. In comparison with that survey, Mexican fintechs are now giving greater priority to low product costs and putting less focus on personalised service, responsiveness to customer needs, and company brand and affiliation.

Fast approvals

The faster the process of customer onboarding, risk categorisation and customer approval, the more likely it is that the consumer will start using the service. Mexican fintechs focusing on this aspect include Conekta (Payments).

Seamless execution

Users increasingly demand that fintech-operated platforms and mobile applications should operate without any delays or interruptions. Fintechs that cite seamless execution as their key value includes Mozper (Payments).

Unique offerings

Innovation is a key route for digital financial services providers to compete with incumbents, or to attract financially-excluded customers. Fintechs offerings can be designed to provide convenience, customised services, low pricing, or other factors that customers value. Fintechs that cite unique offerings as a key value includes LVNA Capital (Blockchain).

Mexico fintech: Value proposition

Key success factors: User-friendliness, fast transaction speed, seamless execution

The factors Mexican fintechs credit most for their success include user-friendly platforms, fast transaction speed, and seamless execution. In contrast to fintechs in other emerging markets, those in Mexico are more likely to cite these top 3 factors (as mentioned above) as their biggest drivers of success, and less likely to mention strong management, extensive distribution network, and strategic partnerships.

In our previous survey, Mexican fintechs cited innovative service offerings and targeting financially excluded customers as their top success factors. While the importance attached to having a large customer base, a favourable regulatory environment, and low operating costs has gained relevance, there is a decline in firms citing innovative service offerings, extensive distribution networks, targeting financially excluded customers, and strategic partnerships.

User-friendly platform

Firms creating an easy-to-use, the seamless interface can benefit from lower customer acquisition costs and improved loyalty. Mexican fintechs citing this as a success factor include Konfio (Lending).

Fast transaction speed

This is one of the success factors most cited by Mexican fintechs. Some fintechs are leveraging open banking APIs to access fast and secure gateways for processing transactions. Blockchain technology is also increasingly being employed. Firms that cite fast transaction speed as a success factor include (Insurtech).

Seamless execution

Users increasingly demand that fintech-operated platforms and mobile applications should operate without any delays or interruptions. Firms citing seamless execution as their success factor include Scorce (Other – client authentication and fraud prevention).

Mexico fintech: Success factors

Future plans: New markets, new products/services, customer segments

Mexican fintechs' top strategic priorities are expanding into new markets, introducing new products/services, and entering new customer segments. Relative to fintechs in other emerging markets, they are more likely to focus on these three areas and are less likely to direct resources towards in-house innovation, increasing use-case of existing products/ services, and raising funds for growth.

In contrast to our previous survey, expanding into new markets, entering strategic partnerships, and introducing new products/services have become bigger strategic priorities. Mexican fintechs are now less likely to focus on entering new customer segments, increasing use cases of existing products/services, and increasing technology investment.

Expanding into new markets

Expanding into new markets gives fintechs the opportunity to accelerate their growth and learning. Clip (Payments) is taking this approach.

Introducing new products and services

Fintechs may seek to expand their service offerings when they have achieved scale in their primary offering. This can help to lift their share of wallet and boost financial returns; for example, payments fintechs looking to expand into lending or investments. Mexican fintechs planning to launch new products include Konfio (Lending).

Entering new customer segments

Many emerging markets have a diverse customer base, by geography, age, and income. Financial exclusion is a major issue in some EMs, like Mexico. Therefore, it makes sense for fintechs to modify their existing offerings to appeal to a broader range of customer segments. Coru (Lending) is taking this direction.

Mexico fintech: Strategic priorities

Targeted innovations: Artificial intelligence, blockchain technology, cryptocurrency functionality

The top innovation targets for Mexican fintechs include artificial intelligence for predictive analysis, blockchain technology, and cryptocurrency functionality. Mexican fintechs are more focused on these three areas than other EMs, but are less keen on using technology to ease customer onboarding or to reduce fraud and defaults, and augmented reality.

In our previous survey, artificial intelligence for predictive analysis, chatbots/virtual assistants, and cloud technology topped the targeted innovation areas for Mexican fintechs. Blockchain technology, quantum computing, and artificial intelligence for predictive analysis are now viewed as more important, while cloud technology, chatbots and virtual assistants for customer education, and augmented reality are less in focus.

Artificial intelligence for predictive analysis

Artificial intelligence can be utilised by fintechs in many ways, for example, to assess future outcomes and boost risk management. Other potential uses include improving operating efficiency or enhancing customer engagement levels. Mexican fintechs targeting greater use of AI include Mozper (Payments).

Blockchain technology

Blockchain has gone beyond cryptocurrency and has the power to boost performance in many areas of fintech operations, including operational efficiency and the user experience. Fintechs targeting blockchain innovations include Conekta (Payments).

Cryptocurrency functionality

Fintechs recognise the growing adoption of cryptocurrency by their customers. According to our survey, almost 25% of the Mexico fintechs already accept cryptocurrency while 58% are planning to do so in the future. Fintechs targeting cryptocurrency functionality innovations include Prestadero (Lending).

Mexico fintech: Targeted innovations

Key growth constraints: Funding/capital, scarcity of talent, regulations, slow customer adoption

The top constraints to growth cited by Mexican fintechs are funding/capital, scarcity of talent, regulations, and slow customer adoption. Compared to fintechs in other emerging markets, they are more concerned about the scarcity of talent, limited smartphone/internet penetration, and funding/capital and are less worried about the size of the market, competition from other fintechs, and competition from the informal sector.

In contrast to our previous survey, the long-term effects of covid-19, limited smartphone/ internet penetration, and funding/ capital have become more important business constraints, while competition from the informal sector and the size and growth of the market are now less of a concern.


Funding/capital is the lifeblood of fintechs; building infrastructure requires significant investment, as does marketing. Regulatory requirements can also be onerous. Firms regarding funding/capital as an important growth constraint include (Insurtech).

Scarcity of talent/ hiring challenges 

Fintechs may face hurdles in hiring qualified candidates with adequate work experience, which may delay expansion plans. Coru (Lending) is facing this issue.


Fintech operations often materially differ from those of incumbents; rulebooks are being continuously updated as regulators catch up with the pace of innovation. Regulatory oversight also tends to rise as fintech firms grow larger. As a result, fintechs can be subject to considerable regulatory uncertainty, which acts as a barrier to investment and growth. Mexican fintechs that regard regulation as a growth constraint include Clip (Payments).

Slow customer adoption

Fintechs can provide a wide range of benefits to their users. However, customers may still raise barriers to these organisations. For example, they may be unwilling to share personal information or to funnel a large proportion of their business through an industry newcomer. Fintechs citing this as an issue include Scorce (Other – client authentication and fraud prevention). 

Mexico fintech: Growth constraints

Fintech regulatory hurdles: Client funding account segregation, deposit insurance, KYC/AML, data protection regulations

There are three federal bodies with jurisdiction over fintechs; Mexico’s Central Bank (Banxico), The Ministry of Finance and Public Credit, and The National Banking and Securities Commission (CNBV).

As per our survey, Mexican fintechs regard their biggest regulatory hurdles to be client funding account segregation, deposit insurance, know your customer/anti-money laundering regulations, and data protection. Relative to fintechs in other emerging markets, client funding account segregation, deposit insurance, and clearing/settlement regulations are more severe matters in Mexico, while capital requirements, cryptocurrency regulations, and taxation are smaller issues.

In our previous survey, capital requirements, deposit insurance, and data protection regulations were the main regulatory hurdles for Mexican fintechs. KYC/ AML, client funding account segregation, and clearing/settlement regulations have become more important regulatory constraints, while capital requirements, taxation, and restrictions on pricing have become less problematic.

Client funding account segregation 

Segregated accounts are held in trust with clients as beneficiaries and kept separate from the Company's own funds. Fintechs that have cited this as a major challenge to their operations include Clip (Payments).

Deposit insurance 

This challenge is cited most frequently by fintechs that are active in payments and lending. Since digital wallet accounts are one of the most frequently used financial products for low-income customers, they play a key financial inclusion role in emerging markets. This is drawing the attention of local regulators, who are understandably concerned about protecting customers’ balances. Affected Mexican fintechs include Mozper (Payments).

Know your customer/ anti-money laundering regulations

KYC/AML compliance can be tougher in countries with a significant undocumented economy (at least relative to informal providers). Fintechs that have cited this as a major challenge to their operations include LVNA Capital (Blockchain).

Data protection regulations

One way fintechs can generate competitive advantages is through the collection and utilisation of customer data. Data protection regulations play a key role in determining the extent to which firms can obtain and use such information, and the processes they must follow to protect it. Fintechs citing data protection regulations as a hurdle to their growth include Coru (Lending).

Mexico fintech: regulatory hurdles

Acknowledgements: The authors thank Rohit Kumar and Rabail Adwani for their assistance with this report