With 73% of its people owning a bank account, Chile has the distinction of having the highest banked population in Latin America.
But does that help digital payments adoption in the country?
“Obviously it helps that people have access to an account as the basis for them to move money through digital means,” Quevedo tells PYMNTS.
If internet users are taken into account, 90.5% are banked. Aside from keeping money in banks, that money needs to be moved, and businesses need to accept it. FinTechs can help provide more and better technologies in these areas. Quevedo spoke of the need for traditional financial institutions to work with FinTechs and accelerate the adoption of digital payments.
“I believe the world is moving in that direction: A 2020 study by Strategic Treasurer asked companies how they view the use of banking versus FinTech solutions in the next three years, with 34% of leaders responding that they would increase the use of FinTech solutions,” Quevedo says.
He adds that Chile’s payments and remittances segments are those with the highest representation in the FinTech world – 23% – and is expected to reach 13 million users over the next three years.
“The high-[banked population] in Chile helps, but the great challenge is in the movement of money and in the collaboration between [FIs] and new FinTech companies,” he said.
Chile Close to Regulating FinTechs
Meanwhile, Chile’s legislature is getting close to approving a new regulatory framework to help monitor the FinTech sector. The regulations would apply many of the existing rules governing traditional bankings onto FinTechs, and could also lay the foundation for open banking in Chile.
To learn more about why payment providers are using Chile as a proving ground in their campaign to improve Latin America’s digital payment adoption rate, download your copy of the the Digitizing Payments In Latin America Playbook, a PYMNTS and Kushki collaboration.