Mexican neobank Vexi has raised $8 million in a Series A funding round.
TechCrunch reported Thursday (Feb. 16) that the startup offers only a credit card, focuses on the Mexican market and aims to offer credit at a competitive rate to underserved consumers.
The firm focuses on customers who can’t get a credit card from a traditional bank because they don’t earn enough to qualify or they work in the informal economy. Only 10% of the country’s people have credit cards and just 20% have access to any form of credit, according to the report.
To offer these consumers access to better financial services, Vexi has developed its own credit scoring system and offers its credit card through American Express, with no third-party issuers or processors, the report said.
The neobank provides interest-free installments, cash back, purchase insurance and interest rates that are competitive in the country. It also enables users to pay with a credit card using only their mobile phone and delivers financial education information through its app, per the report.
Vexi will use the new capital from its Series A to grow its customer base, add to its team and enhance its tech stack and risk algorithms, according to the report.
“Our vision is to use our technology, talent, passion and experience to break the vicious cycle where a person in Latin America cannot access the first line of credit to start their credit history and gets stuck taking out high interest loans that they can never recover from,” Vexi CEO Gabriela Estrada said in the report.
PYMNTS research has found that digital payments providers and FinTechs have flocked to Mexico in recent years, drawn by the growing use of online channels by Mexican consumers.
This, in turn, increased businesses’ interest in supporting cards and other emerging digital payment methods, rapidly accelerating digital payments adoption within the country, according to the “Digitizing Payments in Latin America Playbook,” a PYMNTS and Kushki collaboration.
The report said that offering consumers innovative payment experiences both in-store and online is becoming an imperative for Mexican businesses because, as more competitors emerge, merchants are recognizing that they must offer compelling payment experiences to stand out.